On the contrary, I think PB's games are more AAA now then they've ever been. AAA doesn't mean better though.
AAA for me means open world technology, detailed environments, a lively, breathing world, exploration and all that things that are considered technically above average and therefor expensive to develop. I don't think, that story and consistency is part of that, because it's not necessarily that much about money (compare to indies). And I still have the impression, PB is aming for that goal. But I think their ambitions are higher than their budget and I'm unsure it they have a plan to solve that problem.
Said that, your right. The difference is, when PB started, they were technically cutting edge. Gothic released around the time of Ultima IX, it was the beginning of 3D CRPGs. Their control schemes were awkward from the beginning, but the rest was so impressive, that you simply got used to it to enjoy the rest. But they didn't evolve fast enough since that time and couldn't keep up with global players like Bethesda, Ubisoft or even Warner. And, of course, the whole G3 madness didn't help either. Now they are no longer cutting edge and their games still suffer from basic mistakes. Bad combo.
I don't know if there is already a niche for mediocre games. I guess there could be, because Rebellion and Cyanide/Focus Entertainment still exist. But I'm not sure if I'd really like to play that games any longer. And it is a little bit sad to see that company drifting towards a direction I won't follow, because I think they lost track. They had a big influence on my gaming experience and on a personal level.