In fairness to Bill, as an actor he's had to work with a lot of bad material. Star Trek II: The Wrath of Khan showed me a side of Shatner that I did not think existed. It was a strong script, with the serious human issues of aging and death underpining the strong action plot.
Bill showed a real empathy for Kirk's aging, for his feeling that time had passed him by. Maybe Bill felt it too, but regardless it was one of the few times I really *believed* in Kirk as a character. He was real, he was three dimensional. It's the only Star Trek movie I'll watch over again (except for Star Trek IV: The Voyage Home, which is really a movie that happens to have Star Trek characters in it, more than a "Star Trek movie" per se. )
None of which forgives the awful Star Trek V ... but given decent material to work with, I do think Bill can, or at least could, act.
Also, the brief "Nightmare at 20,000 feet" homage with John Lithgow when Bill first appeared on 3rd Rock from the Sun made me laugh - credits to the writers more than Bill, nonetheless a great moment.
Incidentally, this reminds me of another Star Trek actor, Jonathan Frakes - with a good script, he can be quite good, as several Riker-focussed TNG episodes attest - but with a bad script, he's horrible.