I love retro gaming but I'll be the first to admit the gaming industry has only gotten bigger and better. The genres aren't limited today that much either, how about Catherine? Or Katamari? There's lots of RPG's still released, 2d platformers still live on, tons of puzzle games like Bejeweled and all that, the regular FPS games, hack n slash games, I'm not seeing the limited genres today. If anything gaming has gotten bigger and better.
And thats what makes retro gaming so charming. Would a 1956 Corvette have the amount of charm today if cars were still built with that simplicity? The fact that gaming has evolved so much makes plugging in a Genesis controller that much more charming. Hey remember when controllers had wires??? Remember being 8 and trying to beat Ninja Gaiden?
Plus, do people expect technology to just stay in 1988? Video gaming would be dead if it stayed at that level.