I think many are missing the point Yahtzee has made. Procedural generation can be great, where the designer writes algorithms which create content based on specific rulesets, with the focus being on producing interesting and replayable content. At the heart of things it involves making a basic AI level designer. Diablo III doesn't do this, it just randomises room placements, with all the rooms being samey. There is no procedural design. It's just rolling a dice to see if you get room x or y.
The likes of Dwarf Fortress, ADOM, roguelikes, and a fair few modern indie games all use procedural design, not simplistic random placement. Left4Dead's AI director uses procedural algorithms rather than just throwing random waves of enemies at you (imagine how crap that would be). Random sucks, procedural rules

And you can have procedural stuff that involves very little random number generation that still produces vastly different results with each playthrough.
I'm not sure procedural text narrative has much of a future though. In stories we care too much about character motivations, desires and actions, and getting an algorithm set to make a story with interesting elements of this is quite difficult. There's been some cool stuff done, but it's nowhere near believable. However in games there are ways to effectively make use of procedural narrative but without writing, instead using light touches and letting your imagination and the context fill in the details. A bit like the computer making an interesting and compelling charcoal sketch, though it's incapable of every producing a lifelike portrait oil painting.