IMHO, the reason there's blurring nowadays isn't due to sophistication, that takes place only in the sense that newer hardware is more sophisticated than earlier hardware and can accomplish more, but because non-roleplaying game developers realized that roleplaying has advantages.
It's not 100% about "roll playing", after all, I knew pen and paper gamers who would not touch a complex CRPG like Magic Candle II, Betrayal at Krondor or RoA: Star Trail because they didn't think computer RPGs fit the bill, but they played strategy games and first person shooters. Only when I introduced them to Arena or Daggerfall did they relent and play what I consider the best CRPG series.
Games ported directly from pen and paper rules can run into problems as RPGs and be just as much a hybrid as any Diabloish action RPG. Icewind Dale was RPG lite in many respects and Baldurs Gate felt more like a strategy game with a squad using RPG rules. It was my first experience of the whole party wandering poorly into the fog of war and talking back to my mouse clicks like a peasant in Warcraft. Baldurs Gate 2 had a better storyline and more of an RPG feel.
I never had any doubts when playing Betrayal at Krondor, Magic Candle II or Daggerfall that they were RPGs. Perhaps the best port of a pen and paper game was the Realms of Arkania series, and that was truly "roll playing" (ie catching colds, missing in combat often, failed spells).
I have several posts in that thread and I think it's still one of the better threads there in recent weeks. It might have some newbie awe of today's sophistication vs. old school charm, but it delves into the murky and controversial aspects of how FPS games seem to shade into RPGs and RPGs seem to acquire more action over the past few generations.
When one poster quipped that FPS meant shooters, I replied:
"FPS is a category designation. It started in SF/horror titles. It also fits
Dark Messiah of Might and Magic and it fits
Battlespire as well. Yet, RPG gamers were attracted to Battlespire and will be attracted to Dark Messiah. It's the multiplayer coop and deathmatch aspects, the very linear storyline and the use of discrete levels that places them in the FPS genre.
Roleplaying elements are only added to customize an FPS chassis with these two games. Just as an FPS does not have to be SF or military and involve guns, so too does an RPG not have to involve sword and sorcery. Since terms like First Person Hack and Slash are unwieldy, we can call the whole genre FPS when it's first person. When it's third person, it's action RPG or RPG Lite. Yes, they do all blend into each other but in the purest forms they're recognizable."
Twinfalls, the Oblivion devs are taking two steps forward and one step back in many ways. They need the eye candy for this hardware generation, but they are needlessly mainstreaming to an audience that likes the roleplaying stylings of GTA:SA.
Some of what they would have liked in Daggerfall seems to be in Oblivion. Kvatch is under siege and destroyed by Daedra. Russian beta screenshots (before Bethsoft made them pull the screens) showed a refugee in a camp who said she was lucky to be alive. They could have done more if Oblivion had not been tied to the 360 release and given another year. We'll read Todd or Gavin say in a TES V preview interview:
Q: "What would you have liked to do more in Oblivion?"
A: "More guilds, more weapons, more choice in the massive world we imagined as a sequel to Morrowind. We didn't have enough time and we relied on polls to decide cuts, which we aren't doing this time around now that Pete's moved on to greener pastuers at Borden Dairies"
