I somewhat agree with the OP, but only to some extent.
Yes, there are a lot of uninspired or downright boring games, but overall I guess the number of truely great games per year probably has remained the same.
I still love to play System Shock 2 every now and then, same goes for Deus Ex. Dungeon Master, too. All the LucasArts adventures and some old jump'n runs and shoot'em ups. Overall I played a lot of crappy games in my life, though, which I just forgot about shortly after. But it's a fact that the gaming industry is growing and that there are more and more games being released per year. The great ones just tend to slip through with all that other mess going on.
One thing bothers me, though, and that is the reason why I still agree with the OP: Even the great games released today are much simpler than older games used to be. Bioshock is a prime example for that: It's advertised as SS2's spiritual successor and that heritage is obvious, the moment that guy on the radio begins to address you. Problem is: Everything that was slightly complex in SS2 is now simplified until there's nothing left. Research was turned into shooting enemies, just using a camera instead of a gun. The choices about your character, that you had to stick with in SS2, are now meaningless, and so on.
Another example would be RPGs: I've not seen proper turn-based combat in years (except for the JRPG / Final Fantasy version of turn-based combat). I guess they're just not action-packed enough for today's audience. Character development in RPGs nowadays boils down to a minimalistic skill-tree or is done by "learning by doing", because obviously everything else would require the player to think more than half a minute about what advancements he wants at level-up. I'll just stop here.
So, while there are still great games around nowadays, I miss the complexity of the great, old games in them, too.