George Lucas just got lazy/out of touch as a storyteller ... directing/writing isn't something you have a finite energy for. Lots of directors when they get later on in their career simply "lose it". Francis Ford Coppolla, Brian De Palma are other notably huge directors from the 70s who's output really got terrible as time went on, Lucas is the same story.
George turned himself into "Mr. Mom" after his divorce which I believe devastated him. He was never the same guy after that.
He made the prequels for his 9 year old son, but really Star Wars was never about that. It was more of a space Western/opera with very dark undertones, what Lucas made with the prequels were cartoons basically.
And not even particularily great cartoons. The Clone Wars TV series does a better job of telling the story of Anakin Skywalker and Obi-Wan Kenobi and Padme/Amidala than the movies do.
The prequels we got were not the same prequels a 35-40 year old Lucas would have made. We got movies made by a fat/lazy 55-60 year old family-man Lucas who was just going through the motions and had lost all his edge. Don't get me wrong, he's a great guy ... he just can't bring it as a storyteller anymore.
The last Indiana Jones, which had a script that he had to personally approve was crap too. Not even Spielberg could save it.
