MIDI is less a set of sounds than it is a set of triggers for when samples of sounds occur. You can attach any samples you want to the triggers, from the beeps and boops of 8-bit games to the rich orchestration of more modern games. If the music is unnatural or inorganic sounding, it's the fault of the samples themselves and not the MIDI triggers that cue them. (i.e., it is distinctly possible to have the best of both worlds...depending, of course, on the development budget...orchestration is a hell of a lot more expensive to record than a set of basic, standard samples. Even resampling is more costly than just using prerecorded, looped material.)
If we've reached the point where sound effects are cued with relation to player distance and direction-from-object or -enemy, (perfect examples of this being the power-ups in the
Metroid Prime series, where the sound cues helped eliminate the need to use the x-ray visor to find most hidden objects

, or the similar case of the Lovikov balls in
No More Heroes) then it's most certainly high time that developers pay attention to making the music just as flexible and reactive. It can only improve the depth and tension of the gaming experience, which for series like Metal Gear and Zelda is a massive payoff for all the patience we've spent on them.
There is some amazing music hidden in video games; I give a lot of credit to the composers who helped define our game experiences from the very beginning of the genre/art form/industry until now. But I would love to see John Williams-scale interaction and complexity regardiing the soundtrack, with the repetition of key themes appropriate to the area, the enemies, items...the possibilities for combination and recombination really are as endless as the amount of choices the player has at any given moment in the game.
From this perspective, the future seems pretty bright =)