It's a mixture of things.
Games used to be made by people who were knee deep in arcade culture, meaning the games they made held hard and fast to the rule "If the player wants to progress, you need to be good at this game or have very deep pockets, but at the same time the game needs to be good enough that the player will want to get good enough to progress or shell out the quarters".
Because of an upfront cost the deep pockets part was removed, and we just have "If you want to progress, you need to be good at this game, but at the same time the game needs to be good enough that the player wants to progress".
In the past gaming was new and nobody really understood what what they were doing, so we got a lot of innovation. This resulted in a lot of shit, yet original, games that most people have forgotten by now (and plenty of shit and copycat games).
While games were still sold using their graphics, the real selling point had to be gameplay because graphics hadn't progressed to a point where they could distract from bad, mediocre, or unoriginal gameplay.
Actually being good at a game is a unique kind of fun that can't be replicated with anything else. But modern games publishers realized that they can have a cheaper kind of fun in the form of spectacle. This has a couple of advantages over the fun you get by getting good at a game. And by "advantages" I mean it's more effective at making money.
1.) The gameplay just has to be good enough as to not distract from the spectacle. Even better if the game-play compliments and enhances the spectacle.
2.) More people will play more of the game and play it for longer because they don't need to get very good at it to progress and they don't get frustrated and quit. This means more word of mouth.
3.) It's easier to sell spectacle because you don't need to play a game to see how beautiful it is.
Note: Spectacle isn't inherently bad, and infarct it can be good if it compliments the gameplay (rather than the other way around). But Spectacle in the place of good gameplay does not provide the same kind or level of fun one gets one gets from becoming good at a game.
On a related note, appealing to the maximum number of people ends up appealing to casuals, and so if you aren't a casual you aren't going to be interested in the bigger games coming out.
Difficulty was replaced with tedium, making people feel like they are playing and beating a hard game just because they spent a lot of time on it, and not because they actually demonstrated any skill. There were still tedious games in the past, but those were usually viewed as bad games by most of the people who played them.
In order to fund these multi-million dollar projects, producers have to play it safe and frequently release the game before it is ready. This means lot's of sequels with little to no innovation or shoehorned features that are viewed as "necessary" even though they don't fit and the game would be better without them.
Nostalgia wideness the perceived gap in quality even more.
