With titles like Mass Effect 2 and Assassin’s Creed 2 setting the gaming world ablaze lately you really have to give some credit to devs who made huge sweeping changes to a sequel title, especially when their prequel counterparts were game-of-the-year material to begin with.
I’m not pointing any fingers but I could point DIRECTLY at Assassin’s Creed 2. Assassin’s Creed 1 was great but it got monotonous really fast – free run here, kill this knight, beat this guy up, race this ass across rooftops for no apparent reason, yada yada you get the idea. The devs spent so much time with the mechanics that the end result was a game that was primarily filler until the last mission where the deep as hell story reveals itself. AC2 starts out right where AC1 leaves off and it does so with a story that builds throughout the entire game. This combined with improved mechanics and variety of missions makes for a far improved gaming experience in my opinion.
Mass Effect 2 not only delivered in the same ways but its also so damned awesome that it has huge replay value. I just finished a play-through as an iconic Paragon Sheppard only to immediately start a Renegage Sheppard play-through. I think johnny1051 said it the best – “this is game of the year potential and it was released in January”. Thats a feat that both the devs and gamers alike can feel great about.
Drastic improvements like these make you wonder if these sequels are the result of devs listening to players or critics but I tend to think not. After all, listening to players is what got games like Star Wars Galaxies into MMO limbo. Whatever the cause it’s nice to see that devs can and will take leaps of faith, break away from the cookie cutter franchise staple games, and make some innovative moves. It’s even better when it pays off big.

I haven’t played any of the Mass Effect series (I know start the boos now) so I can’t speak about those, but I did play AC1 and 2 and I have to agree that there was a huge improvement from one to the other.
I have to say though that some sequels will get passed on to other studios and the outcome may not be so great. I can point out KOTOR and KOTOR 2 as an example of this. While I think that KOTOR 2 did have some gameplay improvements, I believe that the story elements took a hit and declined in the sequel when Obsidian took the reigns. So, in your closing paragraph, I’d have to agree but for a different reason. Sales figures usually have a lot to do with the decision to even make a sequel. I don’t think devs are listening much to gamers when they are handed someone else’s work by a company like EA or LucasArts and told “Here. Do something with this.”