My favorite gaming genre is adventure. That's what I grew up with, particularly Sierra adventure games. But I'm not really a fan of LucasArts games, and that's where I started to lose interest in the genre, though that's where most modern adventure game fans got interested.I can't say I know exactly what you're talking about
One of the complaints often brought up with Sierra games were that they had tons of moon logic, red herrings, dead ends, and that people hated dying.
The moon logic I'd agree with, to an extent. One major reason for this is that games went from having to type everything to point and click. This changed the style of the genre though. For example, in King's Quest 4, one of the most notable puzzles was that you were stuck in a whale's mouth and had to use a feather to tickle the whale's uvula. It was fairly obvious from the beginning what you had to do. But these games were aimed at children, and this puzzle was more about extending your vocabulary. These games often mixed in some education with gameplay as well. Remember, there's no Google at the time, and it's hard to look up a word in a dictionary if you only know how to describe something, but not what the something is. But with point and click, this type of puzzle went away. So, how do you create difficult puzzles? This really lead to the moon logic often associated with Sierra, as that's where the difficulty was now brought in.
The game developers at LucasArts didn't like the fact that you died a lot in Sierra games. To be fair to Sierra, it's not like Sierra invented stuff like dying, dead ends, red herrings, etc. This stuff had existed in adventure games from the beginning. Sierra was just the biggest name in the market. But LucasArts didn't like that type of stuff, so you couldn't die anymore, nor get stuck in the game. And the adventure game audience grew, as they viewed the Sierra style as archaic and bad game design that LucasArts remedied.
But to me, that killed the genre. If you look at LucasArts games, they're almost all comedy. With Sierra, they had comedy such as Freddy Pharkas, Leisure Suit Larry, and Space Quest. They had gritty reality such as Police Quest. They had hard Sci-Fi such as Manhunter. They had historical drama such as the Conquests series and Gold Rush. They had mystery with the Laura Bow series. They had fantasy with King's Quest. Etc. You just can't have a game like Police Quest anymore, because Police Quest requires risk & reward. Want to shoot a criminal? You should be able to, but you should also immediately lose the game if it's just a random traffic stop.
Modern adventure games lost the puzzle aspect of adventure games altogether because they removed all the risk, which was now deemed bad game design. And the genre has only gotten easier with "quality of life" enhancements like hotspots. People often say the genre went under because the internet took out all the difficulty, but I think they're wrong, because the games are now so easy and straightforward that I don't ever get stuck. Now these games are just drag something out of your inventory, click on every hotspot, move forward, and repeat until you beat the game.
And this wasn't greedy companies who caused the downfall. Because there are still plenty of indie adventure games. But the indie adventure games all follow the tastes of modern audiences. It's the audience of the genre which changed and drove the changes to the genre, effectively killing the genre for me.