So I pulled out my Genesis last night and tried out some of my old games... the one that stuck out the most? Aladdin. Not only is it a good game, but the animation is INCREDIBLE!

I remember hearing that the actual Disney animators did the art, and it shows. Unlike most sprite work in games the shapes of the characters are REALLY changing. The squash and stretch is super apparent, and as a result, the animations come to life!
Here are some of the enemies:

Now check out Aladdin's sprite:

To compare, the SNES Aladdin was a different game entirely, with more typical "video game" sprites:

It isn't nearly as nice, despite the technical advantages the SNES offered.
The thing that boggles my mind is that most indie pixel games try to emulate the more stiff traditional video game sprites. In my mind, the sprites based on traditional hand animation look worlds better. It seems like people should take a closer look into traditional animation before doing pixel art. Even games like Braid and Cave Story (while awesome looking in their own right) have fairly stiff, restrained animations.
(A great place to start is the book The Animator's Survival Kit
http://www.amazon.com/Animators-Survival-Kit-Richard-Williams/dp/0571202284)
Also, the guys at Shiny (who made Aladdin for Genesis), ended up making Earthworm Jim, which ALSO has some incredible animations. Seems like the time spent working with Disney payed off:

In my opinion, this is the kind of smooth, exciting animation we should be shooting for now, whether it be pixel art or high-res 2D art. I think people should stop using shortcuts. Stop pasting and rotating arms and whatnot and actually draw the frames with life! Flash has made people lazy animators!!!!
What *newer* games can you guys point out that are really awesomely animated? I know Critter Crunch is amazing. But even something like RocketBirds Revolutions seems to cheat the animations with some skeletal 2D flash style animation, and looks kind of stuff because of it.
Do you think it is just a lack of skill that prevents more games from going this route?
A lack of time?
Or something else?