I think a part of it is certainly that removing technical constraints reduces creativity, but I think another big issue is the "creator worship" we as a culture have developed, where a single creative mind is viewed as responsible for a great creation, a brilliant author from whom all of the greatness of the work comes, when that's not the case.
Matsuno wasn't working alone when he directed the creation of Final Fantasy Tactics, Vagrant Story, and Tactics Ogre. He was the head of a team, but it was still a team; we've discussed in this very thread how some of the ideas used in FFT were the work of other creators. This happens times and again - TV series and movies are "the work of a great director" and the success of, say, Buffy TVS or The Avengers was for a time attributed to Joss Whedon's "creative genius" before people knew better; whereas the reality is that those kind of works are the result of a multitude of people working together and, as in all human endeavors, many people working together effortlessly outperform a single person working alone.
I'm not saying that somebody with ultimate leadership and a vision for a project isn't necessary; we've seen where the lack of a director leads to in FFVI and FFVIII - it leads to schizophrenic games that aren't sure what they want to be and bombard the player with a multitude of interesting ideas none of which are properly developed. I'm just saying that unlimited control is also bad, and that it's a cultural problem - until people stop assigning merit for collaborative works to a single creative, we'll keep seeing the pattern of "this person worked on a great *something* - they were given unlimited power on their next *something* - the next *something* was disappointing" repeat itself.
Not sure there is much of a solution here other than being aware of the problem - there's a number of creators who were able to keep doing good work when given more power, but those are usually the people who have a grip on their own ego, and those are hard people to find.
