I've always felt that the whole "Holliday can't act" thing was way overplayed. No, she's not Meryl Streep or, as far as Effies go, as nuanced as Lillias White or Julia McGirt, but by the time I saw her late in the original run, Bennett had somehow beaten a very convincing and real performance out of her. Her comic timing was quite solid early in the show ("I'm not nervous, I'm tired" got a huge laugh), she brought more than enough attitude and stature to the confrontation scenes and displayed a believeable vulnerability in her scenes where needed. One of the reasons her AIATY is such a classic is her ability to project such an intense level of pain and sorrow and emotional rawness into the song. That's not just singing, that's acting -- and that's what separates her version from the Lakishas of the world who can give you the notes, but not the meaning and feeling underneath.
Yes, Holliday would deliver the occasional stilted line reading and had a tendency to overemote like an opera diva, but there was more to her Effie than just her great voice. If there hadn't been, people wouldn't still be talking about that performance as one of the greatest they've ever seen over 25 years later.
"What a story........ everything but the bloodhounds snappin' at her rear end." -- Birdie
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"The Devil Be Hittin' Me" -- Whitney