I agree that we forget a lot of the bad, but there will always be those games that suck. The problem isn't at the low end, its at the high end. The best games use to be magnificent, but now they seem to just seem to be okay. Indie games aside, new games just don't seem have have anything to them. Largely I think they are watered down for a general audience. I mentioned that in another thread and I doubt anyone will argue with that. Not only are they being made for a demographic that can extract enjoyment from merely kicking ass without actually putting any effort into the game. In old games you got a sense of satisfaction because they presented actual challenges. It has also been pointed out that that isn't the only problem. These new games lack spirit. Again, indie games aside, I can't remember the last game I played that actually moved me in any way (that's not true, I felt something reading the dream stories in Lost Odyssey). They are empty husks that present a goal, and are generous at providing tools to accomplish it. In regards the the lack of spirit I think that Saras has a big chuck of the problem down -- the development teams are too large.
I do think some genre's have taken more of a hit than others. The RPG genre has been reduced to shit. The last respectable RPG that I know of was Dragon Age released in 2009, and even that was merely okay. I think a lot of that is due to the mind set of gamers who want action. People say that Dragon Age was boring. I agree, but for different reasons. Turn up the difficulty to nightmare and it starts getting fun. I suspect this isn't the problem most gamers have though. They want to be in the middle of the action, not commanding a small tactical group from above. Dragon Age II is well polished shit, clearly meant to remedy the "problem" most gamer's had with DA:O.
Strategy games seem to have come out a little better. With the demise of Westwood studios, the Command and Conquer series of games is dead (although I'll probably still buy Generals 2 when it drops to $10 assuming the refuse aren't like C&C4's). There seem to be fewer gems in the pile, but they seem to still exist, especially those coming out of Europe. The franchises are dying, but the games are still their. Civ 5 may not be as good as Civ 2 or Alpha Centari (which I think is the best of the lot), but Civ 5 is better than 3 or 4.
Shooters seem to have actually improved. I'm not big of shooters, so I won't comment on them to much, but they do seem better.
The good news is that with digital distribution indie games are coming on strong. Some are even seem to be selling like mainstream games like Endless space with its $30 price tag. The graphics, for the most part still are poor, but they are improving. Hopefully in the next 5 years we will see these indie games that have a lot of the good we grew to expect in older games come into full bloom and displace so many of these lack luster big name games.
[edit] By the way, I think the best thing the big publishers and developers can do at this point is re-release their old games with new graphics, leaving the mechanics and everything else intact. Maybe they could add voice acting for those who refuse to play a game that they have to read.