The highly detailed sets really takes nothing away from those.
It is also my understanding that those free play sets sells well, so they really are complimentary.
There's certainly been a shift in marketing (e.g. Ninjago) but if you want the raw build your own experience it's still there, the offer has just expanded.
The result is smallish, expensive, huge-brick-count sets that're cramped (hard even for kid-hands to play in), hard to non-destructively add on to (you have to rip bricks off to find nubs to attach to, sometimes doing a lot of damage before you've got much useful nub-area exposed), and really hard to repair without the manual and a ton of time if part of it gets smashed.
Some of my older castle sets have a brick count similar to modern structures (again, ones aimed at kids, not architectural models or whatever) but are over twice the size and came with like a dozen minifies and horses. The per-piece price may not be much different on modern sets, but there's been some serious size deflation.
The new ones look better (I'm guessing they sell better, too, for that reason, especially to adults making the buying decisions). The old ones were much better LEGO.
For kids they still have their regular simple or mildly complex sets, depending on age and franchise.
I don't know when you were a kid, but when I was a kid Lego sets _were_ like jigsaw puzzles. Lots of big single-use pieces that were hard to adapt into something new.
Modern Lego sets may look like they can only go together one way, but they are made of a bunch of smaller general-purpose pieces. There is much more room for reusing those for your own creations than there used to be.