I won't write accolades for his musical legacy: Others have already done that, and I can do little more than to corroborate what they say.
In some ways, I think he is the music world's version of Allen Ginsberg: He will be remembered, I believe, as much as a cultural icon as an artistic luminary. However, I think that Reed's artistic footprint might be more deeply embedded than Ginsberg's, if for no other reason than more people have listened to Reed's music, and the work influenced by it, than have the poetry of Ginsberg or his acolytes. Moreover, I think that more people will continue to listen to the music Reed inspired, while the so-called Beat Generation will survive mainly in a few poems of Ginsberg's and a few of Gregory Corso's and, perhaps, Lawrence Ferlinghetti's.
Also, while Reed was less overtly political than Ginsberg, I think he is influencing people who probably don't even realize that some of their favorite music owes something to him.
One reason for that, I believe, is that while Ginsberg and the Beats could be shockingly (for their time) confessional--sometimes to the point of being exhibitionistic--I think Reed's lyrics and music were more self-probing. The result is that, while he may not have uncovered any great universal truths, I feel an almost-intimate sense of cameraderie with him, as he expresses himself, than I do through most of Ginsberg's poetry, as much as I appreciate its rhythms and, at times, its lyricism.
Also, I always had more of a sense of Reed's struggle to be who he is, and of his empathy with those who had similar battles. Perhaps it has to do with his experience of having been forced to undergo electroshock treatments in an attempt to "cure" him of his attractions to other males. I'm sure Ginsberg didn't have an easy time coming of age as a gay man (I can say that with confidence, having talked with him.), but I never felt, in a visceral way, his struggles or even the love and attractions he so celebrates. As an aside, I can feel those things--and a reverence for the human body--practically pulsing through the poetry of Allen's idol, Walt Whitman.
I think Reed's struggles--and the ways in which he came to terms with himself, and others--are seen in his most famous song, Walk On The Wild Side. His portrayal of a transsexual is sensitive and moving, especially given that when the song came out--in 1971--varying from society's scripts about gender and sexuality was even more difficult, even dangerous, than it is now. While he romanticises transgender Candy Darling, he is not at all sentimental or mawkish--It's clear that the she is a prostitute--and he does not make her the butt of a joke, as too many performers did if they mentioned trans people at all.
He also didn't use the trans woman as a receptacle for his own hang-ups about his manhood, as the Kinks' Ray Davies did in Lola a year before Walk On the Wild Side came out.
Perhaps the most disturbing thing, though, is that when trans people weren't punchlines, they were completely ignored. As a result, almost nobody noticed either Davies' or Reed's portrayals of trans people--or even the fact that there were trans people in those songs. As long as Lola's story stays "under the radar", people will continue to listen to, and perhaps enjoy, the song. On the other hand, the sorts of people who notice Candy Darling's identity are also likely to see the overall artistry of Lou Reed's music and will, I believe, keep it in the public's consciousness for much longer.