Richard Morgan has been interviewed by NowGamer over his new role as writer for Crysis 2. In the interview Morgan, not normally known for his shy and retiring views, describes the Halo series as mediocre and Call of Duty: Modern Warfare 2 as examples of bad storytelling, which has already attracted some seriously negative commentary from the fanbases of those series (mostly responding to the highlights on Kotaku and io9 rather than reading the full story, and with rather too much over-use of the somewhat daft, "But if you read the novels Halo has a really good story!" line, which doesn't quite compute as it has no bearing on storytelling within the games).
Morgan makes some interesting points about the use of story and drama in games, although I think it is also true that the interactive element (in the case of a FPS, combat) has to take precedence. A poor shooter with a great story is still a poor game, whilst a great shooter with a poor story is still an enjoyable game, if merely one that you are not going to remember or enjoy for very long. Better still is a story that adapts to a limited medium, something the Half-Life and Max Payne series have done so successfully. A good story in a much more narrative-driven genre like RPGs I would argue is also far more important (hence why I've taken over two years to get halfway through The Witcher, as the story is so mind-numbingly dull, whilst I tore through the full replay of Knights of the Old Republic 1 & 2 and Jade Empire in a matter of weeks last year).
Still, there does appear to be a decline in the art of good storytelling in games. We have Dragon Age and Mass Effect still doing good stuff, but when I think back to the turn of the decade when we had games like StarCraft, Freespace 2, Planescape: Torment, Anachronox, Hostile Waters and Baldur's Gate 2 giving us great stories regardless of genre and look at what we have now, it is hard to argue that this art seems to be in decline.