Performance is an important part of a villain. Shannon, Spacey, Neeson and Murphy really sold me. Scarecrow's mind stuff was some heavy **** in BB (although he was fairly undercut by the later films) and Spacey was one of the most deliciously insane characters I've ever seen (although he was somewhat undercut by the idiot henchmen/girlfriend). Pearce really, really didn't.
Yes, the specific plan they had him working was really well thought out, but as a character I didn't find him even remotely compelling. His motivation was so irritatingly cliched - yes, I know it wasn't all about getting revenge on Stark but it was basically the former weak nerdy guy taking his revenge on the world that oppressed him now that he's become strong and hunky. Blech. Boring.
Add to that the very problematic fact that the fake villain in the first half of the film felt a million times more scary than the real one in the second half and the fact that they ditched what was looking to be an honestly new and interesting IM villain for the sake of bringing out Yet Another Evil Arms Dealer (seriously, is Iron Man ever allowed to fight anything else?).
Also, Extremis abilities had little to no explanation with the result that they made very little sense and the fx they chose to represent them where seriously unimpressive. That's why, overall, Killian comes off to me as irritating, uninteresting and incoherent.
Stane... well, Stane is better than Killian. Bridges did a good job with what he had to work with, but his plan was fairly basic, his intimate relationship with tony didn't come across very well to begin with, so his betrayal of him didn't really feel very important, and his iron suit, while big and strong, wasn't all that threatening and resulted in a slightly anti-climatic final fight. Sure, he doesn't indulge much in grandstanding, but otherwise he's a fairly by-the-numbers villain who doesn't have an outstanding performance, intriguing backstory or unique personality/abilities to make him stand out.