Games are actually the worst way to tell a story for the following reasons:
1) A player's primary concern is not to immerse himself in the story.
It's all subjective, but I'm a big fan of good stories. Who cares what medium it takes? Video games are actually an evolving art form. You could almost say it was growing up quite nicely until it took a step back into infancy with the current console generation.
I like all kinds of games and if I was playing baseball on an old Intellevision I wouldn't expect much story. But sometimes I play adventures because
of the story, not the puzzles or action or graphics.
Even Doom 3 gave a passable background story if you were interested and looked for it. Cutscenes, whether static or semi-interactive are one way to put that forward. I liked Quake 4 with the background talk, giving you a bigger picture of what was happening around you.
I think it's great that developers are putting time into this as it makes our virtual worlds that much more believable and immersive. I think Jerryk was just commenting on how he's read all the lore in the Daggerfall/Morrowind/Oblivion universe. Books are one way to do it, cutscenes are another. I'm sure we'll see many more creative ways to do it in the future. Many people here can probably think of great ways that it's already been used.
Writing a book or making a movie gives complete control to the story teller, the audiance is a passive onlooker. Video games come in all shapes and sizes from rail shooters to sandbox RPGs. It's always been a challenge to code code for all possiblities that a user might make, let alone write personal branches of a story for them that will ultimately make sense.
I think it'll be an interesting time for us gamers once people that can't handle watching a cutscene aren't the only ones developers are creating games for.
Hope that makes sense.