I don't mean this to really bash the game, it is still better than most RPGs on home console this generation; but Square again has made some silly "innovations" that don't really help the game or advance the genre, but rather pollute the traditional RPG experience (which is really a very solid formula and has lots of room to explore) with annoying mechanics.

1. The battle system is overly complex. There is no reason why they just can't use a more simplistic system with a wide variety of options (like Pokemon, Chrono Trigger, and Dragon Quest). There is not really much gained here, and it actually subtracts from the experience. There is nothing special accomplished here with a more complicated system involved. It doesn't make the game "more hardcore!!!!!" or "1337" or whatever pretentious label people apply nowadays. Chrono Trigger is a great example of how a very simple battle system can accomplish a huge amount.

2. The dialogue system is pretty crap, there are a lot of points where you have to select from a list of different responses. This doesn't add anything to the game, it just changes dialogue and makes the player feel like they missed something by choosing one option over another. In adventure games, like Phoenix Wright, where dialogue option selection is a core game mechanic, it actually serves an important end to the quest; but I don't think this works well in RPGs where the core gameplay goals are different from those of non-action based adventure games.

3. Quick Time Events, while cool, it really just feels like pollution. This is a trend I hate, there is too much action genre pollution seeping into RPGs on home console. This is probably why the market is booming on handhelds where action elements are not polluting the genre. Again, this doesn't add to the game at all, it just serves to annoy the player because they are forced to take part in a mini-game with cheap mechanics. While the outcome of this mini-game does effect the scene which plays - it feels like a lot of resources are wasted resources; there is no reason why they couldn't just record one scene as the canon.

Anyway, I don't see why the simple menu selection systems with streamlined dialogue sequences really needs to be tampered with; it is a very solid formula; and as games like Pokemon, Chrono Trigger, and even later ones like FF10 and Dragon Quest 9 have shown, there's still a LOT of potential to explore here. The reason why the RPG genre on home consoles has declined is not because they are too much the same as they have been before; the genre grew and thrived for nearly 20 years without change, and in the last 5-8 years has been declining, ONLY when the majority of developers started to evolve the formula rather than improve on existing formulas and concepts. In reality, they're just making an inferior sub-genre. Dragon Quest 9 released in 2010 to record breaking sales, and that is with a story that has been weaker than previous installations, but what it did was it took the existing formula and improved it without introducing over-complication and action elements. What RPGs should be aiming for is making as simple a system as possible, allowing the player to do as much as possible.

I would assume they need to attract western gamers and this creates the points mentioned.

These could apply to any genre, especially yucky QTEs

The complicated battle system is what made me tolerate FF13 and be willing to play ff13-2 because old RPG battle systems ended up with you pressing X to attack and win...this time around you actually have to think

mass effect, elder scrolls, fable and fall out series and other real western RPGS are stand out popular WRPGs. FF series was a great JRPG series now it tries to be a WRPG, moving away from its traditional JRPG game play. The crazy SE developers see the WRPGs as a threat.

As it has already been pointed out, most of those issues arose when S-E tried to "westernize" the FF series to appeal to a broader audience while ending up alienating some of their already established bases.

I don't think there's anything wrong with the RPG genre nowadays. One series following a set of misguided trends that are not easily appliable to it's spectrum shouldn't overlap other series that have done good things for the genre itself, even on this generation. Even if that series is one of the most critically succesful and popular in the genre, since if that series fall, others will come and take it's place (and I'm speaking as a FF fan myself).

HD remake of FFVI or FFVII would be a much better offering for JRPG fans than either: FFXIII and now FFXIII-2.

If they consider an HD remake of FFVII to be virtually impossible for them, they have no chance to ever do that for FFVI. 

You do make valid points; I am not particularly fond of the action elements in RPGs myself.  Games like Dragon Age and Fable however have blended the two very nicely--Dragon Age being far more strategic.  It takes away from it in games like The Witcher and Sacred 2 (both being great games I just could never fully get into them because of the action method of defeating monsters.)  Elder Scrolls is another I have tried and cannot get into.  I know there is a huge market for games like Elder Scrolls (RPGs played in the first person) but I wish they could make RPGs expansive like Elder Scrolls but without the action elements or the first person elements.  Although an RPG in the style of Resident Evil 4 would be interesting to me.  Clearly everyone has their own opinions on the subject matter.

Nothing wrong with what you posted, just a correction: 

Dragon Age Origins took from a mixture of the styles of both Baldur's Gate gameplay and KOTOR's gameplay, to the point that it was hailed and is still considered to be somewhat of a "Spiritual Succesor" to the Baldur's Gate series (The Witcher series also takes some large cues from these two series but it's inspiration is more on par with Neverwinter Nights), meanwhile Sacred 2 falls in line with the more ARPG style of gameplay of Diablo II (Sacred 2 is considered on of the best Diablo II "Clones" ever released, rightfully so).