Agreed. I recently picked up a PSP from game for the sole purpose of playing Square's FF back catalogue - FF V with it's awesome job system, FF VI for it's amazing storyline, FF VII....
I think it was around 8 that the rot started to set in. There was an over-reliance on the summoned creatures (or Guardian Forces as the game called them) to do most of the work. This meant that the main characters themselves lost a lot of their attachment because aside from their Limit Breaks, they were pretty much just blank slates. It didn't help matters that Squall was an unlikeable asshole as well.
FF IX was a step back in the right direction, although the irritating character syndrome did rear its head from time to time. Cutscenes and summon scenes also increased again.
And then we had FF X. A beautifully rendered game with beautiful graphics but absolutely zero charm. Then X-2, XII, XIII.....in each one the game play and characterisation took a definite back seat to seeing how far they could push the graphics engine.
FF doesn't do it for me any more and I'm happy playing the SNES ones with crappy graphics and characters that I actually give a damn about.