I just read Morpheus' latest story, "Inexplicable," over at Fictionmania. It took a little effort to get into, but was a great read once I did.
What struck me most about it is that unlike many TG authors, he doesn't lean on sex as a plot crutch. In TG, you can't ever really get away from the sex 100%, but the quality writers always seem to be more about the characters and the situations than they are about the X rated stuff.
Maybe I'm being naive, but I think that we might be on the cusp of a change in the genre. Up until now, there has been a lot of focus on sex. More and more, I see the best talents in TG writing either walking away from it as unsatisfying, or writing less for the audience and more to please themselves on a less base level. I think we might be approaching the same moment Science Fiction writing reached in the mid 20th century, where a Rubicon is crossed, leaving our pulp past behind us. On the other shore is a bright future where the craft of writing and the quality of the story are more important than the necessity of including erotic content.
I think the audience is both listening and ready.