The thing I appreciated most about the Kate character, in the context of the Angel series, was she demonstrated that not every 'named' character has a 'character shield'. Most of the time, even to a pretty stable degree in the Whedonverse, you can sorta identify the characters that even when placed in dire situations, are likely to live, and essentially come out intact.
The Kate character, was one that didn't She tried to do good, tried to support Angel, and it completely came back to bite her in the ass. Sure the badguys had Wolfram and Hart to bash on her, but seeing her get so completely crushed in that Police Review Board was rather impressive. I rather liked the hanging unresolved issue of the character, she tries to commit suicide, gets saved by Angel, imparts a "I never invited you in" epiphany to Angel, then effectively disappears from his life. Seems fitting in an odd way.