This is probably one of the finest episodes in a series that is by itself one of the very best ever.
The writing is masterful, bringing a depth to characters usually unseen in any kind of show, let alone an animated children's show. The flashbacks are used in a way that expand the narrative for the whole series.
And this episode is the one that makes Zuko the best character, the more layered and nuanced one, in a series full of great characters.