As a firm believer that Silent Hill couldn't possibly get any worse, this is a damned shame.
Hardly surprising given Konami's current circumstances, though. I'm hoping once Kojima is finished with MGSV we'll see him join up with another major publisher, and then perhaps "P.T." can become a full fledged game without the baggage of it being a Silent Hill game inevitably coloring expectations and so on.
I'll go out on a limb and defend Christophe Ganz' Silent Hill flick - and would second Del Toro being involved in a film adaptation, perhaps of SH2, just to ensure the right level of fan-fallout and potential for greatness. Sure, the Ganz flick disrespectful to the lore that inspired it, but taken on its own it's got fantastic atmosphere and memorable practical effects to spare. It's very reminiscent of French/Italian 1980s horror films that relied more on mood and memorable imagery rather than logic or consistency. The flick would have probably raised less ire had Pyramidhead and other SH2-specific imagery not been used, but since this flick never went too hard with the whole "Personal Hell" angle, it's only a distraction in the broader context.
Besides, anyone who watched the 3D sequel to this knows how much worse it could have been.