Let's please re-frame from jokes about the Cabbage Merchant being the most well-developed character on the show. That joke is really getting old.

^ lol

Right, clearly Foamy guy is more developed! *Hides behind secret bookshelf* I have no self control in light of jokes.

In all seriousness I will use my old explanation: I think it the information that we don't have that makes her so deep and developed. She's one of those characters who started off with everything and ended up with literally nothing. Her character was actually sort of 1 dimensional upon her first arrival but is now oozing complexity. Character development isn't always positive--we saw her go from strong, stable, and practically perfect (in such a way that she wasn't a Sue) to vulnerable, lost, and confused. That's something of character development.

Since you already read the above like twice prior I'll add something new; The fact that in the beginning we saw her as nothing but perfect but then in season 3 you get to see her on the beach and how she was all socially awkward she is (on a non-political level) and confused around the entire male gender (and also that lady whose head she put her drink on).
And for the longest of time we only saw her as downright evil where as you do see a sort of softer side to her further down the road when she apologizes to Ty-Lee. And when she talks to Zuko about him seeing Iroh, she didn't have to show concern because his fate didn't affect her any, but she did.
Basically she went from being all around perfect (classical evil/sadistic villain type flaws aside) to having some rather unexpected social issues and went from down right evil to actually-has-a-functioning-moral-compass-s­ome­tim­es.

I look at most developed characters as, who not only did I learn the most about but also in the meantime learned the most about myself.

It was Zuko for me because we get to watch him develop from bad guy, to confused bad guy, to lost, to found, to lost again, to confused good guy, and them to good guy. Because we were able to see him in so many different stages and learned Uncle's lessons along with him, I feel like he became the most developed. Honor and your path in life isn't something you can gain from someone else, it's something you have to fight for and discover on your own. I think we all, at some point in our lives, are trying to find our way. It was neat to watch Zuko find his.