To my mind, a “megadungeon” in the strictest sense lacks an overarching plot. Indeed, it is a wilderness unto itself that adapts to a variety of different plots. Due to its lack of plot-driven nature, it is not the sole focus of a campaign, although it can very well stand as the tentpole of a campaign, and most proper old school campaigns should have such a centerpiece. But it should not be the raison d’être of the entire campaign.
A megadungeon should be large enough in and of itself to absorb the punishment of repeated forays into the depths without significantly depleting the supply of bad guys (and, ultimately, treasure). The mechanism of this replenishment is irrelevant; fountain of endless orcs, insane demigod, miles of troll warrens, interdimensional portals… The replacement rate of the bad guys should exceed the ability of the players to annihilate them. They can achieve local superiority in a given section of the megadungeon, of course; a given level or sub-level can be cleared out, and even claimed by some of the players (as happened in the original Greyhawk campaign, of course). But in the long run, the dungeon wins; you’re never “done” unless you say you are.
I have some specific problems with The Temple of Elemental Evil that are somewhat beyond the scope of this post. However, regarding the question of whether it meets my own (admittedly arbitrary) criteria for a megadungeon, I think it clearly does not. It most certainly is plot-driven (the players are there to stop the re-ascension of the Temple in the local area and ultimately beyond). The stock of baddies is limited; kill enough elemental priests of the various factions, and you’ll eventually run through ’em all. And, most importantly, it is designed to be “finished”. You thwart the minions of the Temple, stop Zuggtmoy from being freed (or, in some cases, freeing her), and then move on to greener pastures.
Not so with a “classic” megadungeon.