Honestly, I don't think it's "lost its touch" at all'; if anything, it's
found it. While I personally don't watch the show as much these days, I do admit that it has improved vastly in terms of story structure and character development. Sure, the old formulaic episodes/characters are still present to a degree, and some characters seem to have become
Flanderised a bit over the years, but all in all, the series as a whole is in a better place than it was.
The addition of better-developed recurring characters and more arc-based plot structure in the Sinnoh episodes stands out as a huge step in the right direction, and I imagine that things will only get better from there (slowly, mind you; it
did take quite some time to get there). Honestly, were it not for the grating PUSA dub voices (with the sole exception of Jimmy Zoppi's Meowth) and the series's continued tendency to ignore the games' male protagonists (of course, I've been barking up that tree since 2003, and I'm not foolish enough to expect a change any time soon), I'd probably go back to watching regularly again. But, regardless of my admittedly petty problems with it, the show is undeniably better.