There were still a few gems after 2000, e.g. Knight of the Old Republic and Battlefield. However, the sequel to KotOR was released unfinished. This era seems to be filled with collaborations where other companies performed much of the work. I suspect using external resources caused a drop in in-house talent and ultimately left the studio unable to compete against newer and more ambitious studios.
I hope this marks a return of an innovative and competitive LucasArts. It would be wonderful to have the same level of early innovation back and associated with the star wars brand.