The industry grew a lot - surely driven by the most successful titles, but also for the longer tail of developers. More of the total revenue and earnings are captured by the top 100 publishers -- but still, even compared to 2012 or 2013, the 10000th biggest app is earning more due to the opening of all the new territories.
The game earning model moved from a hits based model, where you launch with lots of hype and reviews and generate a lot of earnings in the initial months to a model where long playing loyal players stick with the game over many months & years and monetize via longer term in app purchases. It's not possible to bring back 2010. We need to be ok with that and learn to engage users over longer timelines.
Of course these things are relative or subjective and what have you, but it's pretty rare for people who have a lot of experience playing games to seek out stuff on iOS because of the great quality of games there.
If you build a system that incentivizes garbage games, that's what you get, and well, that is what we have.
Fortunately if you are someone like me, who wants to make actual good games, there are still platforms where you can do that, and do quite decently money-wise. I am hoping those don't go away.
The parallel on the PC side of things of games that have recurring revenue sources lies in the spectrum of WoW / Dota 2 / TF2 / League of Legends to little known asian market MMOs where you buy xp boosts.
The top grossing games are played by a lot of users who play a lot. Similarly, the top titles on mobile have very repeatable revenue sources with high retention rates. I can't blame companies and businesses for investing in predictable revenue streams.
Now without a doubt there is a point of conflict between long user retention and addiction, and the drive to maximize LTV can be taken too far, but I don't think this is happening to most games. As an example, Farmville (2) is a well crafted experience in terms of mechanics, art style, pacing and progression for what it is trying to achieve. I can appreciate the work and thought that went into the game.
I can also similarly appreciate The Witness and I was happy to pay $40 for it. I appreciate the game for different reasons and different set of skills in game design and story telling and pacing of challenges. I love games all about gameplay -- heck, I spend time playing a pure maze puzzle game ( http://www.pathery.com/ ) that about 300 other people play. But this does not stop me from appreciating and respecting the game design work and decisions that went into making the mass market IAP driven games.
I might disagree with the long term reward-loop design of some of the titles, but I would not call them garbage.
Garbage to me is the Flappy Bird clone with poorly sized graphics, ugly buttons and default fonts.
It's what the kids want to play.
I don't think the author's games are much better.