From a pure storytelling perspective, cinematics are light years ahead.
You don't spend years at the film school just because it is fun or cool, you spend years because cinematography is one of the most complex forms of expression, as it incorporates most of all others.
Cinematics in games allow you to have complex narratives with multiple points of view, cinematic framing and lens effects, sometimes fully interactive (Shenmue) sometimes both interactive and non-interactive at the same time (MGS4 microwave scene), which can even be considered an evolution over standard film storytelling as it allows to both keep the cinematic storytelling tehniques intact 'and' create an unprecedented level of connection between the player and the character.
Sure, if you want to keep moving the character while the other characters talk to you, it may be a better approach from a pure gameplay continuity perspective (which some will rightfully argue that it is what gaming is all about), but as a pure storytelling method it is rudimentary and limited to a single perspective, though it also has the advantage of beeing incredibly cheap to produce.
In the end it all comes down to what one wants. Good storytelling "for a game", or good storytelling [period].
"You have the right to the remains of a silent attorney"
