My personal favorite was always the first one, the bubble one.
"First you go like thiiiiiiis..."
Actually...that's the second episode. First was "Help Wanted", when he goes and gets a job at the Krusty Krab.
Has anyone ever considered the fact that it's not the shows that are getting worse, you're just getting older?
Kids back in the day liked the show. Teens back then did not.
Kids today like the show. The teens now do not.
Same for any classic show that still runs. Like Pokemon. Nearly everyone you meet will say "first gen's the best." Because there's so much nostalgia, you were younger, it was entertaining.
There actually was a huge shift before Season 4 (since the movie). The original series producer resigned, and a lot of the original writers for the show left as well. The changes ended up leading to less focus on the actual characters, and more focus on the plot. Problem is, it's almost always the characters who make something funny; not the story itself. And as for teens not liking the show, you're wrong. I don't know about where you grew up, but quite a few teens around here DID like it. And I still enjoy watching the oldies; not for nostalgia either. They're still pretty funny, tbh.
Take that from an 18 year old.
As for my favorite episodes, I honestly quit watching for the most part after the movie (just naturally...it wasn't because I didn't like the episodes, I just never had time to watch TV D: ). From the original three seasons though, I have no particular favorite in any of the seasons. There's always a tie. :\
Season 1: Bubble Stand and F.U.N.
Season 2: Dying for Pie, Frankendoodle, and Sailor Mouth
Season 3: Club Spongebob, Idiot Box, and The Camping Episode