A bunch more people have posted about stories in games. I have lots of opinions, but I'll limit myself to one response, because I have other things to do today.
Tadhg Kelly seems to have several people replying to him already, but that's because he's refuting to something that doesn't exist and spraying the same refutation on things that do exist by misguided fiat.
In English, his flaw is the same as if he had said: "Because space ships are too difficult for you to build in your back yard, nothing that flies exists!"
The thing he's saying is that generated stories aren't the future of games because they are complicated and fragile, and therefore cannot be generated "cleanly". That's true, as far as it goes. I have no doubt that computer-manufactured stories will suck.
But since when - WHEN - did computers manufacture stories? Nobody honestly thinks they will, unless they are hopelessly naive. Maybe fifty years from now, but not today.
No, games with adaptive or generative stories aren't about building a story. They're about helping the player build a story. Or an experience - whatever you choose to call it, if you're the sort that overdefines everything. The game doesn't pop in with grand ideas of its own invention - the game simply utilizes the tools and pieces provided by the writer/programmer to give the most fluid and interesting experience available.
And there IS a basic algorithm for getting a computer to figure out what things the player is interested in and twisting his arm with them. Just because nobody's AAA game has used it doesn't mean it's impossible: it's simple token substitution.
Lastly, it is entirely possible to use PLAYERS as story writers.
The idea that stories are fragile and complicated and therefore not suitable to games is bunk. Advanced 3D graphics are fragile and complicated, too.
Tadgh is evidently a big fan of "simple rules, complex results". So am I. That in no way precludes stories. It's like saying that having a sister precludes having a brother. A family may, in fact, contain both without problems.
Yeah, pure tactical games are popular among a specific crowd. But the experience of, say, Final Fantasy Tactics is not one of simply moving chits around. You're moving people around, and that adds a lot... without diminishing the gameplay. If anything, it offers exciting new gameplay opportunities as missions unfold directly from the plot's push and directly cascading from successes and failures in previous missions.
I simply cannot conceive of how he has decided "interactive storytelling" means "computer-generated storytelling". "Interactive" has a specific meaning, and "generated in isolation" is not it.
Maybe he's been listening solely to zany 16-year-old IF guys and Chris Crawford?
Story - and characters, and graphics - are extremely powerful tools. Writing them off seems absurd, even when a few people are obviously going over the top with their expectations.