Well it's definitely better than Dragon Age, but the storyline isn't really its strong suit. For as much of it as you get to see, its great, but unfortunately there's a really minimal emphasis on it; it's primarily a gameplay driven RPG. Luckily, the gameplay is pretty fantastic, with the innovative online features and the extremely challenging nature of it, but personally just too small an emphasis on the storyline for my tastes.
Yeah, I think the Japanese should stick to where they are good at: storylines.
As I see it, Demon's Souls is an attempt to compete with Western RPGs, which focus more on gameplay.
It would be nice if they come up with another excellent turn-based RPG title, like the FF classics, MOTHER series, or Suikoden.