I think it has a lot of potential, and seeing a sychronous transmedia title like this is really cool, and I think it has a ton of potential. @Cursed - I think you approach it too literally. The game has to be produced in advance as well as the show -- and they are being developed that way so its not like they are just stapling on a game to an existing concept. What I think this will end up looking like will be content releases in the game timed with big events in the show.
I think it will likely end up to be "episodic" in a lot of ways, but without the delimiter of episodes. It makes sense to time the content this way becaus development schedules typically go out 12-18months as it stands, so it's a fairly small task to introduce story elements in line with what's happening in the show.
The scenario you described above with General X and General Y likely won't happen because they are developing the game with the story in mind. They wouldn't switch out a character like that and have them just offer the same quests -- that'd be silly and utterly break immersion in the game and the series.
In terms of the influence of the game on the show itself, that will be scripted. No matter how hard a battle, the gamers will beat it. Playing any game, and the "win" is guaranteed by you playing. They don't have account for if "X" happens, because all games only ever code for when "Y" happens. What I'm imaging is that they release content for like a certain weapon to drop to a single player(s) in game, and then make refernce to a soldier getting a new super-weapon. Or the Hellbugs better a new super weapon that rofl-stomps the player in an in-game battle, and they reference the appearance of the new weapon on the show the following weeks.
The point is there's a TON of ways to do this well, and Trion is actually one of the few studios I think can pull it off.
((Unrelated: In terms of in-house developed television content, SyFy is top notch, and has several contenders amongst the longest running TV shows ever. The bad CGI you are talking about is handled by a different division - the made for TV movies with significant smaller budgets than the TV shows. See shows like Stargate: SG1/Atlantis/Universe)