First off, it wasn't a straight-to-video film. It ran in theaters. People were worried the film would incite gang violence (see http://www.apnewsarchive.com/1988/Police-Stage-Anti-Gang-Sweep-as-Colors-Continues-to-Draw-Crowds/id-4162f984ed2d833bd93bd7d91df90d95) It was a real fear. To try to avoid any issues, my Hispanic date and I went to see it in somewhere on Fairfax Ave, a Jewish neighborhood!
"The gang members are never seen making any serious money or actually doing anything of any significance with regards to criminality." The film's focus didn't need to spend time on their money-making activities - it was about the pervasiveness of the gangs in L.A. All the senseless revenge killing, all the violence, the feeling of fear and hopelessness that it was just spiraling out of control.
I guess I liked it because it seemed realistic. I lived in L.A. in the 80s - and the fear of gangbanging activity was pervasive. Mistaken identity drive-bys happened all the time. (Note in that article - a woman was killed by a stray bullet - in upscale Westwood!) I didn't run anywhere near the gangster circles, but I didn't live in good neighborhoods, and you always had to be aware of your surroundings. e.g. Once my friend and I were in a liquor store and we heard some yelling at the intersection and then a gunshot. My friend ran to the front door to see the commotion (she was like that! Whereas I ran to the back of the store in case they or others ran in.) My friend saw a guy holding his stomach, bleeding, as he jumped through a window into the backseat of a car as it took off. You really didn't feel safe anywhere. Police helicopters were out all the time, looking for people with their floodlights. Now I live in the suburbs of CO, but even now, the sound of a helicopter makes me nervous and puts me on alert. I also liked the film because it's always fun to see places where you live/lived. e.g. The Venice Beach scene. It showed L.A. as it really was - not all glitz and glam, but the nitty gritty.
It's a great time capsule of L.A. in the 80s. Rewatching it last night 28 years later - it was still just as good as the first viewing.
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