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Nights isnt, and never was a game with mass appeal, it was based around old skool game mechanics even back in the saturn days and as such will always be a love it or hate it game. A lot of its appeal was how it used the new analogue control system, which of course is now a moot point.

I dont expect the current 360 crowd will every appreciate a game based on gaining high scores and achieving combos through repeated play of the same levels and so on, I'm actually surprised it rated this highly with the general press of today throwing full marks at every rendition of Halo.

Sega haven't destroyed another of their IPs, they have revived it, its just the market has changed so much over the last decade. If they had taken any other steps to bring the game up to date it would have been far far worse.
Its the radical updating that killed sonic, all of the recent DS and GBA iterations of sonic have been great games.