http://www.youtube.com/watch?v=Q3ULNH4U50Q
Shoot... at least Zork had a compelling plot. Sorta.
I'll go out on a limb and throw out a fuzzy line of demarcation - 1990 (which is around when I graduated HS). So we have folks born pre-1990, and those born post-1990.
I think the 'Imagination Problem' isn't really a problem with imagination in people, but a problem of conditioning with the games that post90 individuals have been exposed to. Video games that they would have played (say, starting around the year 2000) were far more flushed out, and imagination was used to 'fill in the gaps'. Whereas in 1985, imagination
necessarily had to fill MUCH LARGER gaps. Shoot, good RPG video games were so few and far between, that we would mostly play AD&D at that time with, yes, the Rush mix tape and a 2 liter of Shasta. That game is completely mental picture-painting.
Skyrim (2011) vs. Badur's Gate II (2000) vs. The Bard's Tale (1985)
Ok, so the point I think I'm trying to get at is that games have progressively occupied more and more of the free roaming imagination space over time. You don't have to imagine what your player home looks like anymore... there it is in 3D. You don't have to imagine what it sounds like in the dungeon... you hear it, carefully crafted by sound engineers. You don't have to imagine what dragon fire coming at you looks like... you see it in completely fluid animation. And because we are asked to use progressively less and less of our own faculties to flush out game worlds, we progressively rely on it less. And, for the sake of argument, I'd say this is more of an issue with the post90s who have less experience with 'worse' games

Caveat: I just woke up and had 2 sips of coffee before writing this, so this is all probably [censored].