Listening to the day two game of the year podcasts, I couldn't help but cringe a little whenever someone mentioned that the best video game stories basically amount to the dumbest movie stories. That I think, is a ridiculous sentiment. Jeff's idea of cutting out all gameplay and stitching together the cutscenes is also ridiculous. Video games are a completely different medium then movies, and they take advantage of the fact that they even HAVE game play elements to to tell stories in a completely different way. The idea of stripping out game play and stitching together the cutscenes is like saying you go to a movie and remove all the music and see if that movie still has the same emotional impact, or removing the special effects and watching people running around in front of green screens in their dumb mo cap suits.
You can't just strip out a major element of a medium and use it to compare to another medium. The thing that makes games unique is that they are not just two hours long, but rather multiple hours long, with a level of interactivity not seen in other mediums. A lot of the times, the best games reveal their stories during game play sequences, not just during cutscenes. In fact, that was one of the reasons that Uncharted was so fantastic; it took all those scenes that would normally have just been cutscenes in other games, and made them interactive. To remove the interactive element of a game in a medium where much of the actual story is conveyed during game play is... just a weird notion.
I believe that video games have the potential to make better stories. In fact, I personally would go as far as saying that some of the most emotionally resonant stories that I have experienced have been in video games. Sure there is a lot of garbage out there in video games, but there is a ton of garbage out there when it comes to movies and books as well. Bad story telling doesn't necessarily have anything to do with the medium it's presented in.