Let's talk about the Japanese animation industry for a moment. It's... really, really not what it used to be. There's a big misconception outside of Japan that they somehow have a completely accepted "nerd culture" (insamuch as a "nerd culture" exists), because up until today they were very much a huge driving force in the creation of videogames and cartoons. (Comic books are an exception, those are as culturally widespread as novels are in the US.) But here's the reality: Japan actually heavily stigmatizes people who play things like videogames and watch things like cartoons as anti-social, obese, unkempt, and so on. In Japan, videogames and cartoons are for children and otaku. And to clear up some misconceptions, in Japan, otaku is a very derogatory term. In America, the term "otaku" was repurposed to mean "anime fan", when in Japan, otaku means an obsessive fan of anything with the additional implication that said obsessive fan is unable to function socially. Incidentally, because of this, I'm going to try and avoid using Japanese loanwords that mean something different in English.
So let's talk about something completely different for a second: the idea of "moe". (Pronounced without silent e.) It's a slang term used by anime fans to mean a particular kind of emotion that really doesn't have an English equivalent. Frustratingly, the etemology is also quite obfuscated: the best guess Wikipedia could find is that it could be a pun on 燃える (to burn, to get fired up) and 萌える (to sprout, to be infatuated) as well as a pun on the secret identity name of Sailor Saturn, 土萠 ほたる. Notice the kanji is the same, i.e. Hotaru Tomoe. I brought up the etemology in the hopes that it would sort-of explain itself, because it's really hard to explain (and also so I can show off the fact that I know how to make furigana in HTML). The problem with explaining the concept of moe is that most definitions of the term like to make it mean "cute girls in anime", when it can be much, much wider than that.
In fact, boiling down "moe" to mean "cute girls in anime" is precisely what is killing Japanese animation. You see, as I said before, the market for Japanese games and cartoons, at least inside Japan itself, is restricted to children and obsessive fans. In fact, the obsessive fans are probably the most valuable market, because they'll pay huge amounts of money for expensive media products, merchandising, and so on. In very harsh economic terms, Japanese TV animation doesn't make money like it used to. It's not like an ordinary TV series where most of the cost spent making the show is made back in advertising proceeds collected by the broadcast networks.
Ordinary TV (in the US or abroad) is either cheap live-action shows or incredibly cheap reality TV. The thing is, animation is not by any means cheap! It's always been a very expensive artform. Even with the cost-limiting limited animation techniques of the Hanna-Barberra era, the outsourcing of tween work to Korea, the move to digital animation packages like Flash and Toon Boom (which are still shit tools anyway), and replacing complex tweens with cheap-looking CGI, we're still dealing with fairly heavy costs.
So Japanese animation studios trying to push out a series face two problems: first, the heavy costs of being an animation studio, and the dwindling audience for their work. The solution seems to have presented itself in the wave of moe-heavy slice of life series that took over the market after 2007. These series are designed more about presenting the main characters as desirable objects for the purposes of selling related merchandise - character song CDs, figures, dakimakura (lit. hug-pillow, long body pillows with characters printed on them, aka "love pillows"), and so on. And it, sadly, works. To the detriment of people who just wanted good anime.
The end result of this new direction for Japanese animation is the "moeblob": a character designed around a moe aesthetic specifically for the purpose of, again, creating a valuable object to be desired and coveted by a series' predominantly male fanbase. These characters are extremely annoying as someone who enjoys narrative works. They don't do anything other than look cute and do cute. I can't stand moeblobs. They're fundamentally fluff, being packed into "slice-of-life" series - aka series made entirely of fluff.
At one point, "moe" was just an interesting quirk of otherwise substantial characters in narratives that actually went somewhere. Moe was an emotion one felt attached to a particular character's actions within a series. Anything could be moe, really. But at some point this changed. Being moe became the primary focus of character design, and the result was a bunch of unrealistic moe stereotypes sent out for mass-production through the whole animation industry. It's getting harder and harder to find a series where characters aren't being intentionally pushed to act cute in the vain hope that it'll sell a few thousand more vocal CDs or a hundred more figures.
Incidentally, there's a series which was right on the edge of this trend. The first run of the "Rozen Maiden" comic series started in 2002 and lasted until 2007 - a scant few months before I learned of it (translation: a scant few months before I became a 4chan newbie). The run ended due to some really stupid crap between the authors (a comic circle called "Peach-Pit") and the magazine they were serialized in; they ended up adding a really crappy ending as an epilogue in order to finish the series. In 2008 they came back; right on the line where the moe trend was starting to establish itself as a dominant force in Japanese animation. This is also where I felt they were focusing too much on high school slice-of-life bullshit, and I stopped reading around Tale 20 or so.
The only problem with this is that Rozen Maiden is a comic book, not a cartoon, and comic books are considered legitimate reading on the same level as novels are in the US. They didn't necessarily have to focus the series around this, they didn't even have an animated series in production begging them for more moe fluff or anything. Although supposedly the Rozen Maiden cartoons are getting a third series now. Maybe with the third season we can see if the cartoons stick true to what made the series good, or if they decide to drown themselves in moeblob bullshit.
Astute readers might be wondering why Japanese animation studios would rely so heavily on sales of expensive DVDs and Blu-Rays if their fans would pirate the things instead of paying such horrible prices. The answer is... well, they don't. If you think American copyright law is the product of legislative incest between senators and entertainment industry lobbying groups, and that makes you rant about it on forums about why it justifies you pirating comparatively reasonably priced American media, then Japan's copyright laws will probably make you... rant about it on forums twice as much. Let's just say that in most countries, copyright law covers people who make copies. In Japan, they added special copyright laws specifically to criminalize recieving infringing copies, and even knowingly possessing an infringing copy. Japan is the most protected media market in the world.