I have been wondering all along about this, because, at least in Quito (and I assume in Guayaquil as well), they have pretty much everything. Some things are harder to come by, but it doesn´t mean you can´t find them. At first glance it all looks pretty civilised, public transport is ok, they have great parks that facilitate outdoors activities, nice coffee shops to hang around etc.
However, after more than 2 months here, the ugly things are coming to light too.. And the interesting thing is, that both Ecuadorians and foreigners pretty much agree on the same issues..
Customer service
is a far cry from what a European would expect: starting with being extremely slow, to forgetting, repeating to make sure they got the order right, just to mess it up in the end anyway, not giving correct change, not knowing what they´re selling, to following you like a “tail” around the shop etc.
Burocracy
is another thing and this affects both locals and foreigners. Just an example: to get my “ID” I had to go to two different places first, just to get information and then end up in a third place where I could actually get what I needed. Not to mention systems´ downtime and then the whole process shuts down, people having to go back several times to get their papers, being given wrong information and wasting time going to places you are not even supposed to go to etc. The bribing system seems to work best in cases like this though, so if you got cash to spare you can get people to do things for you.
Locals
are not as helpful as in Peru.. There they would take you by the hand and bring you to where you needed to be.. Here, forget someone walking you for 5 mins. when you are in trouble, forget about relying on getting accurate information from people. Even if they don´t know what they are saying or where they´re sending you, they will try to “help” nevertheless. So, relying on information from locals will get you nowhere, except for lost. Best bet are tourist information offices or other foreigners.
Now a delicate point, and I don´t mean to offend anyone, be they Ecuadorian or foreigners. Especially in Quito, Ecuadorian girls and guys alike will look to take advantage of any foreigner who is willing and blind.. not going too much into detail, just a tip for any foreigners reading this: WATCH OUT! They are all very nice, will try to get under your skin, will not be honest (this to put it nicely and not say some of these people are compulsive liars etc.).. Wish I had better things to tell, but everywhere you hear a story about a foreigner, these things come up too.
Child labour
not sure if there are any factories, like in other countries, where kids are being put to work, but you can seen them in the streets, selling cigarettes, sweets, shining shoes and sometimes even helping out in the family business, like restaurants etc.
Overcharging foreigners
is another normal thing here. It can be done overtly or covertly, it doesn´t matter, it´s always there. It can be something small, like a piece of fruit which yesterday you bought for 25 cents and tomorrow it´s 35 (because of the size), or, it can be bus fares, because of course, foreigners would not know the price for that, or, other things like entries to museums, national parks etc. Everybody everywhere is trying to take advantage financially of somebody..
It is really sad, because a large part of the country is functioning on tourism and the profits this brings in. The thing is, nobody thinks of the consequences and the future. Because everything here still is relatively cheap for foreigners they are probably right, they will not have a problem for a while.. Wonder what will happen when all the oil runs out (?).
Robberies and muggings
are normal occurrences here. Again, everyone is affected, both locals and foreigners. There are things you can do to avoid putting yourself in this kind of situation, but sometimes you just get it.. The only thing you can do is report it to the police who gather the information in order to publish statistics at the end of the year. I doubt they ever catch anyone.. I was reading the paper a couple of weeks ago and there was a report on the percentage in assaults; it has gone up in the last year in every province in the country. They actually have daily tips in El Comercio (newspaper) on how to avoid things like kidnappings, extortions, muggings, assaults etc. It says a lot about the country I think, once you see these warnings in the major newspaper around.
Any other negative things… Hmm, let´s see.. Generally the mentality and attitude of “I don´t give a sh..”, I can do anything to anybody and will get away with it, I don´t care about anything or anyone else, I´ll take advantage for as long as I can and then move on to the next source etc. is everywhere. Again, I apologise to all the nice people out there (I have met nice Ecuadorians), this is just the reality.
Some concepts like personal space, honesty, punctuality, integrity, having principles etc. are pretty much lost on people here. On buses and in the streets you will have people brushing against you, leaning into you, literally breathing down your neck (don´t get me started on bad breath and BO), 5 minutes usually means 20-30 minutes, being helpful usually hides an alternative motive (either showing others that they are helpful, so just for show), or something is expected in return, it doesn´t matter what we are like, the important thing is that everything we own is FLASHY – big cars, big jewellery, big egos etc.
Maybe once you move away from the cities and into the country things are different and I am surely looking forward to more positive reports.

Having said that, I have also met a few people who are retired and thinking of settling here.. I guess there are advantages and life can be easy-going if you don´t have too many expectations: things are relatively cheap, there are a lot of nice places outside of Quito to settle, if you are well off you can easily buy a piece of land and set up a business etc.
Although, doing business with locals is another thing yet again. I have a friend here who owns a small ginger processing factory (producing ginger sweets); there is no online business, people pay (if and when they pay) by cheque, you have to go collect the payments, workers are slow and unreliable, there are no tax benefits/reliefs for small businesses etc.
So still thinking about settling in Ecuador? Think twice and do your research…