You know this happens every time some form of entertainment/artform grows beyond its roots and becomes both populist and 'taken over by the suits' to coin a phrase?
Watch the nice little scene from Almost Famous where Lester talks about the changes in the music industry and how they're killing it for a nice summary of how many 'hardcore' fans feel when this happens. It sounds like how you're feeling about the games industry to me. Unfortunately that's what it is now, an industry that can generate billions in revenue and make people very, very rich.
Personally I think what many people miss is that its often the case that certain games are not selling less but that others are selling more.
I think story driven games and games aiming higher in terms of art or pushing the medium will continue to come. But they will not dominate nor will they outnumber the volume of more casual / fun / copycat games. So long as games like MGS4 or Bioshock or GTA IV get made I don't really care if they sell less than Wii Beach Party. And in truth I want games like Wii Sports, too, or Raving Rabbits. My kids love them and they're fun to play with them. And when they're in bed then I can sit down and play some GTA IV or MGS 4.
Its the nature of how a medium evolves when it grows in sales and market penetration.
There will still be developers who want to take what's been accomplished in games as diverse as Deus Ex, System Shock, Ico, Okami, etc. and push it further. Not everyone is going to 'jump ship' and start making party games using Wii mote to throw frisbees or whatever. I think that is the fear though that lies behind your (understandable and I suspect fairly common) reaction. You're worried that not enough content will be made for you and too much for those more casual, less hardcore gamers.
Well, its a fair worry. There surely will be even more developers pushing out 'safe' games carefully aimed at known demographics and preferences (for example Halo 3 is to me the very definition of a 'safe' game even if it seems hardcore and sells lots - it didn't take one risk at all and was designed in the same manner as a summer blockbuster movie). Even more there will be a glut of smaller, copycat games simply aiming to copy a previous hit and provide 'more of the same' whether on Wii or whatever.
Even 360 and PS3 (particularly 360 as its been longer on market) don't escape this as 'hardcore' platforms. Look at a site like Metacritic and take a long look at the volume of dross for the 360 next to the big hitters and good stuff. It's the nature of the game. For every Mass Effect or COD4 you're going to get a lot of Turok's and the like.
There is also a resurgence of what I call 'pure' games - i.e there is no real story simply incredibly well tuned and hopefully fun dynamics. I look to titles like Super Stardust HD here, or Pixel Juice Monsters. Super Mario Galaxy (pls don't argue Princess Peach getting captured again is a story!) is in my view the most polished, high profile example I can think of. In many ways the Wii is most associated with this but I look to great PSN / Live examples too.
So you're right about one thing - we should stop thinking hardcore and casual and start thinking good game / bad game.
But we shouldn't narrow down the genres. Pixel Juice Monsters is a good game as is HD Super Startdust. So is Super Mario Galaxy and Wii Sports. Let's have good games be they story driven and striving for art, polished slick blockbusters like Halo, fun games like Super Galaxy or simply fun diversions like Super Startdust - and let's ignore the bad and relegate it to the dustbin where they belong.
As for the changes to the videogame landscape. Well, I think they're inevitable - even Lester knew that.
Try to be reasonable... its easier than you think...
