Bad art in games is the same as bad art in an illustration or painting. I know it when i see it

But the usual culprits are:
Character designs
Non of this subjective bs, shitty character design leaves a smell that lingers in your nostrils until you light a match. Usually happens when you have non-artists design characters for you. You see you in the west artists dont get nearly the amount of respect that programmers, designers, or producers do. Can you name 3 kick game concept artists from the US? Japanese companies covet their artists moreso than their progammers at times.
Also good character design does not mean take a photo of a muscle builder copy in photoshop and add shoulder pads, knee pads, a cool eye tatoo and spikes. sigh....
SHitty levels:
Happens when you have pc mod map maker design maps instead of an artist with the help of the designer. THe perfect solution is when a level maker is a great artist also, but that rarely happens.
Color:
Man o man, color theory is so neglected in art schools and it shows in the games. Great color does not mean use every color in the freagin palette. Nuff said'
Concept art, concept art...
spend more than a few days on it please...thank you
Also about this japanese vs west thing..
I would say the japanese in the past have placed a lot more imporatance in their games than we have in the west. Games is the japanese' hollywood. Game developers get japans top artists. Here in us we get guys who couldn't make it in illustration, comics, or hollywood. They also spend a lot more time in the art design stage as opposed to us western dudes. I mean pick up a game art book from japan and compare to the ones here...if you can find one
Things are changing now that big money is involved but who knows. Of course this doesnt mean everyone..
props to Blizzard, Ubisoft, lucasarts, bioware, and a few others...they are outhere!