The answer to this blog is probably going to be that the game industry dug this hole all by themselves and that we now have to live with it.
Storytelling through fragments and situations
Stories are something that is very important to us humans and also a crucial part of many video games. In some games the player is the author of the story, for example in Civilization where you are given some basic start resources and are then free to decide how your story will play out. In other games the designer has the most control of the story and the game mechanics do their best to guide the payer through the narrative (which may dynamic or linear).
Horror Tip: The Statement of Randolph Carter
This is one of my favorite stories from HP Lovecraft and it should also serve as an excellent introduction. It is very short and a perfect example of fear of the unknown. This story really got to under my skin and has served as an important influence when coming up with good scares for our horror games.