I haven't watched that video (yet), but I'll say this: there's a difference between "racing games aren't as good as they used to be" and "racing games aren't as good as they could be." As much as people retroactively claim that Forza Motorsport 4 was the best the series ever got, one of the things that kept running through my head -- and dozens of threads on the forum -- was how much of a shame it was that the game didn't have weather, day/night, open-wheel cars, or tracks like Spa and Bathurst. Ten years later people think the problem with recent Forza Motorsport titles is that the career feels off, there's no Fujimi Kaido, and they can't tootle around in a Toyota Aygo. The problem isn't that Forza got "worse", it's that it shifted focus, plugging some important gaps but creating new ones in the process.
That said, most devs from indies to AAAs seem to be hilariously risk-averse: oh, Soulsborne games are huge, let's just imitate that. Everyone's doing battle royale? Work that into our multiplayer. The Kids demand Fortnite levels of personalization, we better give it to 'em. And one of the biggest risks, as NFS Unbound proved, is trying to create a sense of style, something beyond just super-photorealistic immersion that looks like a slightly cleaner version of reality. I'm too old to be in Unbound's supposed target demo of 12-year-olds and 20-something influencers who act like 12-year-olds, so I can see some of the transparent Skateboard Buscemi goofiness in its attempts to be trendy and up-to-date with youth culture. But at least they tried, and I'd at least like to see more devs actually try to lean more into a credible effort at capturing the weirdness and excitement and distinctive eclecticism of car culture as effectively as, say, the Tony Hawk games embodied skate culture or NBA Street did basketball.
Then again, this is also becoming an increasingly niche genre for reasons I feel have less to do with the quality of the games than a general pop-culture shift, but that's a whole other complicated narrative that leaves me more pessimistic about the potential future of racing games than anything FH5 or GT7 has done.