My rant/opinion
I think bad writing is as often as not in the eye of the beholder. This is why you have so many arguements between fanboys over what "rocks" and what "sucks".
When it comes to video games, I think in some cases more time could be spent, but I also think there are issues involved where the game developer and writer might not see see eye to eye, or a writer is being asked to pretty much create a story around a bunch of random stuff a comittee decided fanboys would think of as awesome. Not exactly an excuse, but me pointing out that in many cases I do not think bad writing could have been avoided within a franchise without changing the entire design process that spawned the game. What's more when a company is beating a franchise into a ground, coming up with say a fourth installment of a series that long ago tied up the initial storyline that made it great, and probably a couple of
spin off stories as well... there isn't much that can be done to save it.
This is to say nothing of series that change their writers/design teams between chapters, or ones that decide to write things to be mysterious and obtuse, and figure the mystery will keep things going and they can always wrap everything up later. Of course in the end they wind up with a situation where any answer they contrive to tie everything up will be unsatisfying.
But then again "bad" is subjective as you can see by all the people who either love or hate the plotline of "Halo". Not to mention games that are attempting to be a homage to a certain kind of genere. I mean when I play a "Zombie Survival" game I expect a certain kind of stereotypical plot. I don't expect anything really new and differant, and the quality mostly comes down to how well they manage to do the expected cliques rather than whether they use them at all. Some people automatically call something stereotypical bad for being stereotypical. I don't nessicarly agree.
Then of course there are works based on established properties. A lot of the best games of this type come accross as having bad writing to the uninitiated as they rarely take the time to explain themselves. In most cases this is the correct approach because to do otherwise wastes a lot of time in retreading things, or involves trying to relaunch and redefine a well loved franchise to simplify it for people first encountering it, to the vast annoyance of the core audience.
Looking at say the original "Alone In The Dark" game as an example, the quality of the writing is debatable. I personally believe that at the time that game was developed the core audience for it were horror fans and gamers. There was a lot of overlap then between PnP gamers and video gamers, while this still exists, then it was even more pronounced as you could guess by things like the various "D&D" Gold Box games and such. Most people gaming and who were into horror at least had a passing knowlege of HP Lovecraft's writing (directly, not just cribbed from others), or at least the "Call Of Cthulhu" RPG. The game had a few referances to the mythos, and took a rather investigative approach to the story rather than telling you exactly what was going on in excruiciating detail every 5 minutes (I guess similar to a recent article praising Half Life for a similar practice). When it was over a lot of people felt the game was well written/well designed because they felt they got enough of an answer and indication of what was going on as they should from that kind of a story. The game spawned not one, but TWO sequels as well as the "Jack In The Dark" mini game.
Opinions vary like with everything, but in some cases too much information winds up being a bad thing. It all depends on the effect your going for.
As far as Devil May Cry 4 goes, well ask yourself how many series of anything have managed to maintain good writing through 4 installments. It has happened, but it's rare. Most of the common exceptions like say "Final Fantasy" do it because the series is a label/brand name as opposed to an ongoing story. Chances are DMC4 was designed by a team of people who felt there were enough fanboys who wanted to thump more demons, that they could do another game. The cinematics like the one mentioned there were doubtlessly concocted to be pure fan service (Nero Vs. Dante, I always wanted to see it like that...). The whole set up being an excuse for that to happen. Grahm was saying (in Unskippable) that parts of it seemed pretty gay, but also consider that by this point a lot of the hardcore fanbase are probably people who were so obsessed that they were writing stuff like DMC slashfic. The writer was probably told flat out the scene was intended to be a pure fan service fight scene, with enough vague homoeroticism to fanservice that crowd, but not so gay as to alientate the heterosexual fanbase, with a piece of female eye candy present with one of the characters to make it obvious that they aren't ACTUALLY supposed to be gay.
Of course then again consider Devil May Cry already passed it's hero out to be used in Shin Megami Tensei: Nocture (fairly well actually). I got the impression then that they weren't taking the franchise seriously. I wouldn't be surprised if they think they can milk a couple of bucks if they decide to release "Devil May Cry 5: Devil May Crying Game" based on shocking gender revelations about "your favorite DMC characters" despite the fact that DMC 4 seemed to hit the budget shelves fairly quickly.