Ah, the games buzzword of the year; "Storytelling". Jim Ward, president of LucasArts, gets in on the action in this interview at Boomtown
Right now there is no story in games. Gaming right now is about button management, basically. Take for instance Grand Theft Auto, a great game, I love it and play it, a fantastic game. But the story of that is just simply a broad context, you drive around some places and shoot people. But there is no real compelling story telling, very rarely you see this in good games.// Cue obligatory Sam & Max reference //
In Half-Life, there was an attempt. But we need to infuse story into those games and make them compelling because every kind of entertainment, if it's a movie, a play, whatever it is, is all based on story and characters.
Source: Boomtown
And it has been a conscious decision to pare back in-house development during a period of major restructuring.
I mean, anyone play San Andreas? It had a pretty good story
I believe that the farther we move along technology wise, the easier it becomes to lose sight of the "point". They* can keep making this statement each new generation, that they're going to really work harder this time, promise! But we can only hope that for every Fight Club - The Game, we get a Katamari Damacy.
*The Man
He may be referring to GTAIII which /was/ pretty poor plot-wise.