A physicist notes the way in which Tolkien explicated the distinction between the illuminating fairy tale and the dark deceit of the retrophobic modern fantasy:
I was intrigued by the discussion on retrophobia in fantasy literature, and it made me recall a relevant passage from Professor Wood’s The Gospel According to Tolkien:
The essence of fairy-stories is that they satisfy our heart’s deepest desire: to know a world other than our own, a world that has not been flattened and shrunk and emptied of mystery. To enter this other world, the fairy tale resorts to fantasy in the literal sense. It deals with phantasms or representations of things not generally believed to exist in our primary world: elves (the older word for faires), hobbits, wizards, dwarves, Ringwraiths, wargs, orcs, and the like. Far from being unreal or fantastic in the popular sense, these creatures embody the invisible qualities of the eternal world — love and death, courage and cowardice, terror and hope — that always impinge on our own visible universe. Fairy-stories “open as door on Other Time” Tolkien writes, “and if we pass through, though only for a moment, we stand outside our own time, outside Time itself, perhaps.” Hence Tolkien’s insistence that all fantasy-creations must have the mythic character of the supernatural world as well as the historical consistency of the natural world. The question to be posed for fantasy as also for many of the biblical narratives is not, therefore, “Did these things literally happen?” but “Does their happening reveal the truth?”
This ties into your discussion of the modern Wormtongues, as well. Wood and Tolkien are essentially saying what you’re saying: modern fantasy fails, because important elements of the narrative do not reveal the truth, and readers know it.
The reason so much modern fantasy fails so spectacularly is not because it is soulless and derivative, although it is, but because it quite literally hates the heart. It is written out of hatred, it is based on lies, and it is designed to obscure rather than reveal. Take R. Scott Bakker’s series, The Prince of Nothing. The events chronicled within it did not literally happen, but their happening, quite intentionally, obscures the truth, indeed, it claims that there is no such thing as truth. The ugliness of the disgusting Face Dancers is an apt metaphor for the ugly incoherence at the core of the modernist vision for the series.
This is why GRR Martin will never be the American JRR Tolkien. What are the truths revealed by A Song of Ice and Fire? That people of good will are stupid? That everyone is pointlessly sadistic? That no good deed goes unpunished? That sex is either rape, incest, or prostitution? The only truths to be found in Martin are negative; there is nothing beautiful or mythic about Westeros. There is death, cowardice, and terror, but where is the love, courage, and hope? When viewed from this perspective, it becomes apparent that decline of the series observed in the two most recent books are merely the flowering of a retrophobic seed that was planted at the start.
My point is not that those who write in the older tradition are better writers. If anything, it is remarkable that those who handicap their narratives so severely with their moral blindness and ideological retrophobia manage to produce works that are still compelling in some way. The problem is that, no matter how highly skilled they are, genuine greatness will always elude them and their works, despite their merits, will rapidly fade into the forgotten dust of history because they do not speak to the eternal truths at the heart of Man.