This post quit getting love when the other one showed up and I feel sorry for it.
I have to agree that in general, the artistic merit of video games has done more than come a long way in the past few years. It's not just graphics, sound, and storytelling individually that make a striking game, but achieving a blend of the three that creates an experience that transcends mere entertainment. I've found that the games I've given the most praise lately tend to be less traditional and more artistic in nature.
Take Shadow of the Colossus, for example. There's no music, the graphical presentation is minimal, and the plot can be explained in two sentences. But the game has a pure feeling to it. When I had to spend 15 minutes driving across the ocean to get to an island in Wind Waker, I felt like Nintendo was artificially inflating the playtime of the game. When I have to spend 15 minutes trekking across rough territory in SoC, I feel like I'm having an adventure. There's really no difference between the two; WW's oceans are sparsely populated with only one or two types of creatures, most of which you can simply dodge. SoC's landscapes are sparsely populated with small creatures you cannot interact with. But as I approach the end of the journey in SoC, the tension builds and the landscape transforms from scenery to strategy. Do I need to climb this tower to summon the Colossus? Is that cave somewhere I could hide during the battle? If I travel this way is it safe for me to retreat quickly? Compare this to what happens as you approach your goal in Wind Waker. Oh look, one of those shark things, if I just jump right now it's gone. Oh look a barrel, better veer slightly left. Oh look another shark...
Wind Waker is not a bad game. But to me, Wind Waker was simply a traditional Zelda game with enhanced graphics. It really did little to innovate, and a lot of its best features haven't been reproduced in its successors.
Shadow of the Colossus, on the other hand, represents the potential of next-gen gaming to me: to provide an experience that does more than entertain me, but leaves me with a feeling of appreciation for its art.
To make an analogy, I liken Wind Waker to an Andy Warhol "work"; sure, it's got artistic value, but in a way it's just pop art and while it displays all of the technical aspects of good art, you feel bad giving it a high score because you know it's not pushing any envelopes. The games I like are more like Picasso's Guernica; at first glance they don't appear to be much. But as you play the game, you realize it is delivering an experience that can't be recreated by anything else.
Probably only 30% of games qualify as art, and of those probably only 5% qualify as good art. But next-gen hardware has made it easier than ever to present a game that is worth more to the player than a few hours of entertainment.