One explanation is that the quality always lacked a certain polish because mainstream publishers shied away from most gay content. Then there is the fact that unlike say, African American readers, the population of GLBT readers has never been large enough to truly support a vibrant GLBT literature scene that has broken up. One caveat here is that I haven't spent much time looking at the GLBT self-published culture that is going on and that might be doing much better than the traditional model.

Personally, I am more interested in reading mainstream genre fiction that includes GLBT characters. Here I think the situation has improved dramatically over the years. In the past it seemed that GLBT characters were either missing entirely, or were used to create a seedy, other atmosphere (want to show an alternative bar is really degenerate? Show two men kissing!) or a villainous character was made ambiguously gay in order to make him even more evil.

Today, I'm seeing GLBT characters included much more positively. While I didn't care for The Vacationers or The Three, both included gay characters in very natural, realistic ways that I thought actually reflected the way GLBT people live in the world. And that, I think, is a pretty awesome thing.