I think your feeling this 'being out of touch' with whats popular. I used to hear the same stuff about how trashy anime and comics got in the 90's compared to what they where in the 80's etc.
I do agree, video game art in Japan was better during late 90's/00's and its not just SEGA that is changing, something like Alpha 3's art style is superior in my opinion to Street Fighter V, but will I dismiss a game due to them changing the art style over time? No.