Compared to other genres, I actually think shooters (not fps) have one of the highest ratios of fun-to-flops.
I've gone through (or at least tried out) nearly every genesis game, and quite a huge number of NES and SNES games, the dominant systems of that era. I'd say at least 1/3rd of the shooters are quite fun, with many high quality, and a few additional that are worthy based on some feature. And they aren't all made by the same companies.
In contrast, side-scrolling action platform games continued to dominate the market for a long long time, and the vast majority of them are just junk. Besides the excellent mario and Sonic games, there's very few worthy of recognition. Earthworm Jim, Cool Spot, and Kirby are a few off the top of my head (all excellent too). Even Disney churns out crap (except for Aladdin). I can't believe how many walk-across-the-screen and jump and punch/slash people games I've tried that are just garbage. I can't believe anyone paid 50$ for them!
Of course side-scrollers kinda slowed down at the same time as shooters (saturn/ps1 era) due to the sudden need for 3D graphics. Shooters got taken over by sim shooters (3D flying/shooting), and side-scrollers got taken over by 3rd person adventure games (which still plague us 10 years later with their awful camera angles and questionable gameplay).
Fighters did actually seem to mostly remain fairly high quality (except some notable highly marketted crap like rise of the robots) once they got off the ground. Initial fighters with none or only the standard 4 moves were rather boring in my opinion (including the first street fighters). Somehow 4 moves just isn't enough. Once you master them, you just end up launching fireballs the whole game and it gets boring. Once MKII and EC came around (for me anyway, others could have been first), they upped the anti with many useful special moves per character and amusing deaths that kept you playing to hope to see one. And these games still go strong in my opinion, but are unfairly outmarketted by 3D fighters.
I think 3D fighters, while they have great graphics and tons of moves, all started to blend together almost from the onset. The characters and moves and gameplay just seem all alike on all of them. And mapping textures onto limited polygons just isn't as artistic as hi-res sprites. You'd think that 3D fighters would have had a crash 5 years ago, but nope. We're on MK15, VF5, Tekken 23, etc. They should just start naming them after the year now. Actually, named after the next year.
Which brings me to another thought, but that's for another thread.
But anyway, maybe it's just because shooters are so simple, it's easier to make one not suck. You just need some interesting bosses, cool weapons, and a smooth scrolling background, and you're in business. Some of the ones I've played that are bad, you'd think they had to try to make it this bad on purpose.
But I take that back. I've played many games that have all three of those features, but they're still just not fun for some reason you can't lay your finger on. There's some gameplay aspect with how fast and in what patterns the enemies come at you, and how fast your ship moves. Level design that's more than just graphics that's required to make the gameplay fun.
The truth is, I didn't like shooters at all back in the early 90s. It wasn't until my college sega rebirth that I became obsessed with them. Back in the 90s, I only wanted 3D, because it was rare and exciting. 2D wasn't exciting. When I looked at the back of the box for a 2D shooter, it looked like a flat playing field with little vehicles. I used to play 1942 on NES, and I used to think it was good (what the hell were we thinking?). But I didn't want NES games on my Genesis. I wanted the 3D bonus levels of Sonic 3, virtua racing, Ballz, and the 3D stuff on the CD and 32x.
3D caused the shooter crash, not the quality of shooters, in my opinion.