I think the problem rests mainly with the focus on creating cinematic experiences, as well as the conservative approach of most JRPG makers in general.

One of my personal pet-peeves of any modern JRPG is how long and dull attack animations are - before FFVII this wasn't a problem because there was no focus on making "cool" cinematics, but with the move to 3D, spellcasting animations started topping 10 seconds, which is just ridiciulous and eats up time I would rather spend playing the game. I have nothing against turn-based gameplay, but this is something I feel needs to be rectified.

I also feel there is a distinct lack of meaningful innovation within the genre. These days you get a lot of gimmicks and cutscenes, but you don't see stuff like FF VI's Opera Scene, which effectively changed the mise en scene of the game and created an opera within an opera, which in turn merged gameplay and story beautifully without resorting to minigames, a la FF VII.

Also, most games don't even use their cinematics to tell the story properly. For example: I don't care for the Tales' series artstyle, but the animation is simply atrocious. Good animation is one of the most important facets in creating believable, life-like characters, and Tales, along with most of it's ilk, has completely dropped the ball in that area. It's not enough to use motion capture during important cutscenes, you need to use it during gameplay or else it just looks like you have a bunch of dolls running around.

Motion capture was used in ToS:DotNW but I heard the effect is rather creepy.  Also, they might be using "bad" animations to please Japanese gamers.  I asked another member of this forum why Tri-Ace games use doll animations and he said it was because it was really popular among Japanese gamers.  FFXIII is the exception rather than the rule.  Also, Persona 3 and 4's animations aren't great but you don't see me complaining about it.  I think the animations are "bad" because they don't appeal to us since Western gamers tend to prefer realism.

I didn't like Dragon Quest 8 very much.

Why can S-E be smart like Microsoft and hire VA with talent?  They do it with FF and KH but not with SO, IU, etc.  LO benefitted from having Tara Strong and Michael Bell voicing Seth and Sed, respectively.

maybe that has to do with the fact that oh idk the games was made by tri ace. Its there product so they decided how it gets develpoed and who the VA will be(as far as i no thats not a publishers job). sheesh its no wonder SE stopped working with these guys cant blame em really they were taking the fall for tri ace's mistakes

Pardon my ignorance here, but I'm not exactly into the genre.

But isn't the whole argument of the blockbuster titles not being out yet, quite a flat excuse? How is this one game going to change the whether or not good JRPGs have and will be released this generation? Isn't it "just" another game to add to the small amount of good ones?

And this is my point.  There should be more than just FF or KH.  There shoudl be more than just SE.  Atlus may do a good job, but they haven't really tried anything big on current gen hardware.

As for the ToV love, that actually makes me quite excited about the game.  Now I really hope the ps3 version comes to the West like Eternal Sonata.  And I still need to pick up Eternal Sonata.  The story may be laughable at times, and the game may be very linear, but the presentation and music are simply beautiful.

But what exactly did there used to be in the JRPG genre that was amazing that isn't around now?  What titles wow'd you during the last gen that don't have an equivalent yet?  Only PS2 JRPG's I can think of that were amazing and don't yet have an equivalent out or announced are Persona, Xenosaga, and Shadow Hearts (yes I know some didn't like it but I did).  But as you've mentioned we already have VC, ToV, and LO and I'm sure another Persona game will come eventually. 

Don't forget Suikoden (we only got a DS spinoff)

JRPGs follow the similar format that you had on 8bit computer RPGs from EONS ago. It isn't a wonder, because the likes of Ultima inspired JRPGs. What they do is actually become more linear and put a focus on story telling, and means to tell the story. Final Fantasy, Dragon Quest, and others pay homage to Bard's Tale and Ultima.

What has happened is innovation is happening in the western RPG format, where other genres creep into the mix, like FPS in Mass Effect and Fallout 3. Similar storytelling focus, and character development, but other genres come in. They aren't locked into a format that has sold a bunch, so they innovate. As it is now JRPG is a format of RPG that has gotten old. And now that every genre is improved storytelling, and have added stat-building, they are getting to be particularly locked in.  And, at their hard, is grinding through menus.  Other game genres have added other ways to grind that are entertaining.  Grinding IS addicting though.