I was pondering why this discrepancy might be the case, and I think the reason has to do with my perspective on Buffy the first time around as opposed to my perspective on it now. The first time I watched Buffy I was less interested in Buffy as a character than in the world she inhabited and the characters she interacted with. As a result, the only thing that really stuck in my mind about "Helpless" was the fact that Giles was dismissed from the Watchers' Council. This time around, possibly because I began with the film, I've come at the show with a more Buffy-centered view of Buffy. Which is not to say that the way I saw the show before was "wrong" or in any way inferior to the way I see it now. That was just the way I saw things then, and this is how I see them now. Anyway.
"Buffy, you could never be helpless or boring, not even if you tried."
What I've noticed much more this time around is how this episode functions as a thematic follow-up on the scene I singled out in my review of "Prophecy Girl," the finale of the first season. If you don't recall, I'm referring to the scene where Buffy learns of the prophecy foretelling her death. In that moment we realize that Buffy's calling as the Slayer isn't just unfair: it's kind of sickening. We see that idea pushed farther in this episode, and it's for that reason that the show drops some of the comedy from its comedy-horror format and gives us more of a straightforward horror film situation, set in a dilapidated old building with a powerless female protagonist and a deranged killer.
It makes for a significant tone shift, and that shift helps highlight the wrongness of the whole situation. Sarah Michelle Gellar's performance is incredibly effective, getting across all of the terror and trauma of the situation. It's easy to take for granted how great Sarah is in every single episode, so it's nice to have one like this where she really hits it out of the park: the scene in the library where she learns that Giles is responsible for her loss of strength is pretty amazing. Anthony Stewart Head also gives a fantastic performance, completely selling all of the twisted moral complexity of his situation. It's hard to tell whether we should feel disgusted with him for colluding with the Council for so long or proud of him for defying them when he does, and that's a tension that really adds to this episode. In any case, this represents a pretty big shift for Giles as a character, who was originally an authority figure in opposition to Buffy's rebellious spirit and is now fully allied with it against the authority of the Watchers' Council.
There are a bunch of other great little moments in this episode: even Cordelia gets to shine: she switches on a dime from bitch mode to concerned friend when it's obvious that Buffy's in no mood for wisecracks, and that restores some much-needed humanity to her character that's been missing the past couple episodes. And Xander and Oz's discussion of the effects of different varieties of Kryptonite in the Superman mythos is amusing and gives the two more common ground. The episode even has a great one-off villain, the vampire Kralik, who is easily one of the most intriguing and threatening minor vampire characters the show has ever had, thanks to Jeff Kober's performance. Kober, by the way, returns in the show's sixth season as a minor recurring character.
But these fantastic elements aside, it's Buffy and Giles that really make this story shine. Their relationship has been one of the most satisfying elements of the series thus far, and this episode has seen some of the most significant developments in that area.