Gaming, as a whole, is not being "drug down" by any single thing more than we, the consumers.
You see, at the end of the day, people don't make games because it fills the children of the world with happiness - they do so because it is possible to make money doing so. Unfortunately, as games have progressed we have begun to see two distinct branches of gaming emerging, and both come with their share of evils and triumphs.
The first is the ultra-expensive AAA line of games. Halo 3, Killzone 2, COD 4 and their ilk require teams of hundreds of people to toil for years to produce them. With each generation of technology, the amount of work required to produce an infintesimal amount of content increases resulting in ever increasing investment required to produce a game of given length. When so much is invested, the companies involved assume a tremendous amount of risk and they naturally seek to mitigate this risk as well as they can. This naturally results in the iterative process we see in games. Basically, if a mechanic or idea worked remarkably well in one game, it is often copied directly into another. A recent example can be seen in ODST's firefight mode.
The simple reason this is the case is that developers, even the large and ultra-successful are not in a position to tolerate failure well - a few bad games can bury the company in short order. Thus, long standing developers, who's name is already well known are often forced down the route of "playing it safe" because they have the most to lose. The largest of developers/publishers (EA, Activision, Microsoft, Sony, Square/Enix/Ubisoft etc) are in a more comfortable position to take risks, but the market has demonstrated time and again that they are perfectly willing to buy iterative improvements for a franchise.
The bright side of things here is that AAA titles have the capacity to capture the attention of a huge portion of the gaming audience, and any time one of these games does make a notable improvement or display a brilliant idea it tends to reach a far wider audience than might otherwise be possible.
On the other side of the coin you have the generally cheaper casual games (The Sims is a notable deviation from this, being both casual and fantastically expensive to produce). The problem with these games is they are most often produced by people with little experience with making games and as such the best they can do is make something that is little more than a blatant copy of some other game (see the plethora of tower defense games for example) in their first effort. Since there are often no control mechanisms in place in this market, the result is, inevitably, a glut of games that are at best medicore.
The bright side is that, often these development teams (or, as is often the case, single developers) have literally nothing to lose. Much like the indie movie or music scenes, the independent game space has an immense amount of freedom. Failure is not a possibility to be considered during a friday staff meeting - it is almost a certainty. This lends itself towards a certain reckless abandon where new ideas are often introduced and experimented with. Generally, games in this space fail to gain any real acclaim or reknown, but the mechanics and ideas produced here often make their way into a larger budget title down the road (Portal for example).
Of course, there is a third segment of the industry, and that is the title that is neither casual nor AAA. By and large this segment is a barren no-mans land of shovelware produced not out of a desire to push the medium forward or test new and brilliant ideas but rather out of the mercenary need to generate revenue to support big budget games. While the both the casual and AAA markets produce a number of notable games every year, these middle budget games never seem to make any real impact beyond consuming shelf space at your local games retailer. If one looks for a bright spot in this space, the only hope comes from the fact that these games, in spite of being generally bad, still tend to make money, and it is that money that allows the giant publishers/studios to carry on with the more grandiose schemes they have up their sleeves.
