Bioware's competition was with the empty-headed console shooters that dominated the 2000s, not any of Black Isle/Troika/Obsidian/CDPR's output.
Their lingering prestige at this point is entirely owned to not having seen a serious effort from them since Inquisition.
I sort of agree, although Baldurs Gate was released in 1998, and everyone loved it despite it not being very good.
I think part of the reason for that has more to do with the DnD games craze of the 1990s rather than the mindless shooters of the 2000s (not to mention the 1990s was also dominated by shooters too).
From about 1989 to 1999, every PC RPG was basically trying to be "Your classic DnD sessions with your mates, but on your PC!" and it was absolutely to their detriment. To make it worse, being able to fill your game with a somewhat large but mediocre world was downright impressive at the time, so I can see WHY people liked Baldur's Gate. The game definitely has some strong points and the size and complexity of it for the time is downright impressive, I don't mean to disparage it too much. It's just that, underneath it all, the story really isn't that great, the main villains are super cheesy, and most of the characters suck. The encounter design is bland and uninteresting, most of the combat is just auto-generated critters that you fight while traversing largely empty wilderness maps trying to reach your next town, rather than being handcrafted encounters, and the DnD ruleset (a ruleset which was designed around dungeon crawling, not talking RPGs) absolutely falls apart when the majority of your game is spent in what are essentially call-and-response dialogue boxes with cariacatures of characters.
Bioware characters tend to fall into one of a few archetypes. You will see the buff guy who takes no nonesense, the squishy wizard with the squeaky voice who is "working on something too important to talk to you", the guy that steals everything, the slurring drunk, and the uber evil villain who laughs a lot and has a deep voice. Bioware has no other character ideas. Once you see this trope, BioWare writing unravels and becomes obvious for the repetitive nonsense that it is.
To me it seems like people enjoyed Baldur's Gate because it was technically impressive, and because "OMG I can play a DnD campaign on my computer, that's amazing!"
Ironically, when the focus is shifted away from the talking aspect and the "deep story" (which IMO is impossible to get across using the call-and-response dialogue system of the infinity engine and most other RPGs) and is shifted more towards dungeon crawling and combat, the DnD ruleset gets really good. It's why Icewind Dale is, to this day, hands down the best Infinity Engine game in my opinion. None of the "walking through the wilderness to get to the next town" crap, no randomly-generated critters, really good combat, and the story is surprisingly decent for what is, at the end of the day, a dungeon crawl. I would say Planescape Torment has the best story of any Infinity Engine game, but the gameplay is so horrendously bad that the game is virtually unplayable, which is why I still think IWD (and BG1 and 2) are better games than it. I know that's a heretical idea on these forums, but it's correct, so I don't care what other people think.
Playing DnD for the story is like watching porn for the story. It was never designed to be used like that and you're going to have a bad experience. Even now, decades after the focus of most players shifted from dungeon crawling to storytelling, 5E has still focused the vast majority of it's mechanics around combat, traps, and environmental hazards (the sort of things you'd find in a dungeon) and has virtually nothing gameplay-wise for dealing with social interaction, outside of the occasional persuasion/intimidation/insight/deception check.
Is it POSSIBLE to have a good story in a DnD based game? Yeah. Planescape does it, to the absolute detriment of it's gameplay. It's just a shame Baldur's Gate has major issues with it's story that make it mostly mediocre, and the terrible pacing and wilderness wandering slows the already lackluster story to a crawl.
