I think the main problem is that it is a new medium and integrating a story with the gameplay is too hard for a lot of developers to wrap their head around. Papers Please has a story, but it is told mostly through your interaction with the game mechanics, which are then coloured by a context. Meanwhile a lot of bad game stories are told in the style of someone who wants to tell a standard visual, movie story, often at odds or completely divorced from the gameplay itself.
Have you ever noticed how games categorize themselves by the mechanics, where as all other entertainment mediums focus on the genre? Games like Grand Theft Auto are a "sandbox, third person action adventure" first and a "crime thriller/comedy" as a distant second. Papers Please doesn't fall into an obvious gameplay category, they just call it an "indie", and that's because the creator didn't try to borrow an established gameplay mechanic first, he came up with a setting and premise first, and invented new mechanics to suit it. I think that was a lot of people's frustration with Bioshock: Infinite - we could see a neat story in there somewhere, but it was being paired up with a standard, obligatory FPS set up that didn't relate in anyway to what was going on.
Have you ever noticed how games categorize themselves by the mechanics, where as all other entertainment mediums focus on the genre? Games like Grand Theft Auto are a "sandbox, third person action adventure" first and a "crime thriller/comedy" as a distant second. Papers Please doesn't fall into an obvious gameplay category, they just call it an "indie", and that's because the creator didn't try to borrow an established gameplay mechanic first, he came up with a setting and premise first, and invented new mechanics to suit it. I think that was a lot of people's frustration with Bioshock: Infinite - we could see a neat story in there somewhere, but it was being paired up with a standard, obligatory FPS set up that didn't relate in anyway to what was going on.