In fact, if you look at Skyrim (a game I only need the smallest of excuses to talk about) you can see some sort of middleground there. People will comment on what you’re wearing, what type of character you’re playing, things that you’ve done, and even comment when you’re ill – all things that re-enforce your sense of place in the world. And then, mechanically, things like only getting a bounty on your head if a witness actually manages to report you to a guard make sensible player logic like “no witnesses” make sense. Of course, to counter balance you still get the stupid things like guards telling you to be careful around the mages guild even though you, in fact, run it, or that you can still be a murderous psychopath yet still invited to save the world. So, while still flawed and stories aren’t particularly branching – there’s progress there, especially when it’s part of such a massive, gorgeous, freeform (and admittedly buggy) world.
If the next five years of big-title gaming development can focus on closing that disparity of what we want to do in a world and what developers can afford to let us do, rather than pushing technology to add complexity to raw assets, we can end up with environments that are more interactive, manipulable, intelligent and alive, rather than just prettier. It’s important to empower us, as players, to do whatever we want in games and, essentially, to make the choices and options worthwhile by having the game react in the most interesting ways it can.