I think Mother 3 is the best example I can come up with for the "right way" to do video game writing. It wasn't perfect, of course, and the ending was rather abrupt and less satisfying than I expected, but the experience of playing the game really sucked me in. Rather than starting with "an evil wizard has awoken and you have been chosen to save the world," you start off in a peaceful, happy village. You get to know the characters, which are well-written, and become attached to them. Then something bad happens and you lose people you've already bonded with. And then everything starts to change, over time. The chapter system does a good job of showing how time passes and making the events feel more real, like they have actual consequences. There's no real "choices," but as an interactive storytelling exercise it's made of win. Add good, original gameplay, great music, and emotional scenes, and I think that might have been the best game I ever played, based on writing alone.
I don't want to spoil any more of it for those who haven't played it yet, but has anyone else enjoyed this one as much as me? I think it could serve as a good example of the "right" way to write a game, to contrast all the general criticisms of most game writing.