Agreed. The big problem is they do not have legal rights to the Silmarallion, and the is where Tolkine really goes into detail about the material covered in the first season.
I particuallry think doing the whole Fall of Numenor storyline without access to the Akallabeth, the section of the Silmarssion dealing with jus that, is a bad,bad idea.
And "Sauron the Fair" looks ridiculous.
Of course, they should have done Sauron the Fair from the beginning, that is the way it is in the books, rather then what we got.
He does not masquerade like he did in the first season, he proclaims he is Sauron, but a new reforemed Sauron, now just trying to do the will of the Valar to make amends for his following Melkor. He is lying, of course, but it makes more sense then what we got in season one.
I just HATE seeing the works of Tolkien treated like a freaking comic book franchise.