You know that Pokemon Special chapter where Giovanni initially deceives Red to analyze and observe his techniques? It's kinda like that.
Now, had the series followed game mechanics from the start, I would be more disappointed at the loss (and, frankly, bored from the exposition), here. But I'm disappointed on how the writers allowed Ash to lose, when he really didn't have to. Now, he's been a long-time Trainer, and he should have compensated for having an inexperienced roster. On the other hand, I think looking at the Psycho Cranidos, it's difficult to combat. At least when comparing to Paul's Battle, it was slightly less intense.
With few exceptions, the Gym Battles have never been this...savage until now. If this Battle would be based on one of the final Gym Battles, that's fine. However, if the rest of the Sinnoh Gym Battles are like this first one, Ash really has his work cut out for him.
Also, we learn that Paul isn't a complete jackass, like how he acts with the child Trainer. Good touch. Although, that deflates when measured by his paucity of lines.
And Wobbuffet is so darling in its lab coat.