There are so many problems I don't know where to start, and I don't have a lot of time before I have to head out. Yet I do want to contribute some things. The problem is that JRPGs are stagnant compared to their western counterparts. The genre has moved towards open worlds. Away from linear story telling. Dialogue choices are expected, as is moral choice. Leveling and gear aren't linear either. You are given choices about what gear supports your play style, and leveling usually involves the choice of what skill you want. Your even given control of crafting your own unique character.
Then as others have pointed out the Story in JRPGs which oddly enough focus heavily on story aren't well written. They are directed at tweens. Sadly that isn't the hardcore public that would actually purchase one of these titles. That age group is overwhelmingly adult. You can't ask them to keep playing if your writing stories for eleven year olds. That will not hold their interest. Children can play more mature games, and might not get all of what is going on. However an adult just can't play a game that is for children. This is boring, and never rewarding. Yes adults need things like real conflict between characters, and other things like sexual tension.
Basically the genre needs to grow up. Hand holding is ten years ago. Players are demanding more freedom, more choice, and something that actually stimulates their intellect. They are finding that in Mass Effect, Fallout, and Borderlands. They are rarely finding that in JRPGs.
