Oh dear. This is really a brain vs. heart decision.
Brain: Exit Wounds and the whole arc with Gray and Jack's childhood.
Heart: The Jack/Ianto arc in the second half of S2.
Heart wins. I'm going to indulge my inner shipper. Partly, I guess, because I have the suspicion that something like 50-70% of the whole Gray disaster could have been fixed simply by casting a different actor. There are some things that could be improved writing-wise, but on the whole Exit Wounds is probably not a lot worse or more incoherent than many other TW episodes I love. Chris Chibnall's episodes mostly worked for me otherwise, both in S1 and S2, and Adrift and Fragments especially were really good. Exit Wounds I think might have worked already a lot better with an older and more experienced actor as Gray. (And now that I'm thinking about it, it might have been interesting to cast someone who even looked a bit older than JB. Older, more broken. Relative age is irrelevant anyway in this story, and it'd have emphasised Gray's anger and suffering.) Add an explanation of how Jack remained sane while being buried alive for almost two millennia and don't make him say 'I forgive you' still lying in the cryo-freeze drawer, and we'd be (mostly) good. I think.
So, Jack and Ianto. What went wrong here might not be as obvious as the flaws of Exit Wounds, but it'd need a lot more fixing on a much more fundamental level, because there is no Jack/Ianto arc after Ianto didn't die in Reset, and before that it consists of equal amounts relationship building and foreshadowing of Ianto's death. Sometimes, like in To the Last Man, both at once, with the episode juxtaposing the relationships between Jack and Ianto and Toshiko and Tommy, showing two couples divided by time ('I worried you'd see me getting older.'), and ultimately by death. Jack's 'You love him. Makes you vulnerable.' / 'That's your decision.' / 'You both have to live by it', to Gwen in Meat would also have taken on a different meaning with Ianto dead two episodes later. Both episodes explicitly refer to the fact that working in Torchwood and having a relationship in this environment may mean having to endanger the person you love, even having to sacrifice them. It's not just your friends you send 'into danger, knowing the stakes aren't the same for you, that you might get them killed while you walk away unscathed', it's also your lovers.
With the exception of Fragments, which wouldn't have to be rewritten, there are only are a handful of disconnected Jack/Ianto scenes after Reset, but no coherent arc, which in my opinion seriously weakened the relationship, because the other two relationship arcs are tied up meaningfully in Exit Wounds: Rhys completely supports Gwen and recognises that what she does is important after all the fights they had over Torchwood, and Owen at least in the end cares enough not to hurt Tosh any further and even apologises to her. Admittedly this isn't something you notice immediately—it took me about half a year to pinpoint the reason for my vague dissatisfaction—, but a lot of things in S2 would have fallen into place a lot more logically if Ianto had died in Reset.
Once again, heart vs. brain. Of course I didn't want him to die. But intellectually I can't help being curious what S2 with undead!Ianto would have been like, especially as this seems to have been something of a bigger plot point ('that strand runs throughout the rest of the series'—RTD in The Writer's Tale).
Day 01: Favourite Torchwood Member
Day 02: Least Favourite Torchwood Member
Day 03: Favourite Series
Day 04: Favourite Episode
Day 05: Least Favourite Episode
Day 06: Something You Liked That Most People Didn't
Day 07: Favourite Alien/Villain
Day 08: Favourite Minor Character
Day 09: A Scene That Made You Cry
Day 10: A Scene That Made You Smile
Day 11: A Scene That Made You Angry
Day 12: Favourite Quote
Day 13: Favourite Promo Picture
Day 14: Favourite Couple
Day 15: Favourite Couple Scene
Day 16: Favourite Piece of Music
Day 17: Something You’d Like To Re-write
Day 18: Character You Relate To The Most
Day 19: Favourite Outfit
Day 20: Favourite Gwen Moment
Day 21: Favourite Ianto Moment
Day 22: Favourite Jack Moment
Day 23: Favourite Owen Moment
Day 24: Favourite Toshiko Moment
Day 25: Shag/Cliff/Marry?
Day 26: A Torchwood Geek Moment You’ve Had
Day 27: Favourite Location Or Set
Day 28: Where You Think The Series Should Continue To
Day 29: Best Torchwood on Doctor Who Moment
Day 30: Why You Love Torchwood