'Derivative' is a really annoying term due to it's overuse. Simply put, all mediums strive on the concept of derivation. It is not an inherently bad thing.
There is being TOO derivative, yeah, that's not good. If a work can't stand up on it's own merits, and it has the same merits as something else prior to it, then that work will never improve upon past versions, but this kind of thing happening is a lot rarer than people might make it out to be. Pretty much every medium lives on deriving concepts, story, character, music, style, mood etc. from other works. If something does well, other works will copy, or take inspiration, and in doing so, they can do well too. This is where the line between industry and art is crossed, though.
A derivative, in the bad sense, game, will simply copy what is popular and attempt to use that to make itself popular. Good use of derivation would be when a game looks at previous entries in the genre, or if it's a sequel, their own original, and looks at the flaws in that make up. Deriving the concept from previous examples and improving it is what gives us the pinnacles of genres, and what allows games to improve over time.
In short, derivation is incredibly important to not only games, but every medium out there, and while reliance on it and solely it can lead to stagnation, it is still integral to creating a great work.
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