As much as I hate games that use cinematics and contrived narratives as a crutch to hide the lazy game design involved in their products, I think there's room for games that successfully blends both and strike that perfect balance. I say blend, because the more smelted they are together, seamlessly, the more each part is justified. Assuming both are of high quality and flow smoothly from one part to the other. I will agree however that the more technology advances, the more the priorities are jumbled for game producers.
This is why I miss the past two generations, because I feel the limited technology *forced* everyone to find a perfect balance. It's really ironic that we celebrate games that don't fall into that pit today, when they should be the rule, not the exception.