It's tautological to say that the industry serves the customers what they (most) demand. With time the industry's gotten very good at telling what will sell, nowadays it's dominated by hugely profitable companies, whereas the companies from the Golden Era went bankrupt (arguably the best game maker, Microprose, was nearly bankrupt all the time until it disappeared).
Technology played a role in this. During the last decade graphics have improved, but stayed more or less the same. The polygons have more vertices and the lighting is better or something, but The Elder Scrolls III and V (9 years apart) have the same graphics, basically.
Back in the time computers were really capable of qualitatively new things every year, and everyone was wondering "what the future of digital entertainment will be like". If you were not too little during the late 80s and early 90s, you will remember everyone on the TV saying that in a few years all man-machine interfaces would be in "virtual reality". Even the possibility to make big 3D games was great when it appeared, TES Arena and Daggerfall, Wolfenstein 3D and Doom, and Tomb Raider were really innovative. Back in the Golden Era of video games, makers were in disarray, and they simply tried everything, with little idea if the consumers would like it, or if they were going to lose money. Nowadays they know in advance how much money will they make.
It's not that the technology is very advanced, that's always relative. It's that it's relatively stationary. The situation is more or less the same with portable devices or with the Wii.
"Indie" developers can try new things, most times they want to make games they like themselves, not to sell. Although many indie games are completely unoriginal too. But indie developers won't replace the industry, at most the ones who are successfully can become part of it. But that doesn't change everything said above. For now the outlook is stationary.
http://memebase.com/2011/05/26/memes...getting-worse/