JRPG is my favourite genre EVER. And, current gen ones aren't that bad at all.
Star Ocean 4 was pretty good, goin' to play it again on PS3
Lost Odyssey and Infinite Undiscovery were pretty good too.
Valkyria Chronicles was beautiful and, now I have high expectacion from White Knight Chronicle..
but yes, their not as good as they used too..
maybe its just me but, i think they don't need innovation, rather they need to turn back a little and be more classic, more japanese.
Things like: turn based combat, pre render background, lot of side quest, deep story, random encounter.. are things that a JRPG needs.. and developers should try to found a way to implement that with new technology
But, overall I have some hopes for the future. On the PS2 the best rpgs found they're way on the latter part of the console life cicle, and probably will be the same with PS3. (don't know about 360.. if they can't sell more in Japan then most title will be PS3 exclusive.. like Ar tonelico, Last Rebellion, Atelier Roronoa)