eVinceW21: As it happens I had BLTs for lunch and - yes - it was awesome.
LOL more to the point, when did video game stories make much sense anyway? I mean in terms of logical internal consistency I can count the number of story-heavy RPGs alone with narratives and quest structures that actually make sense together on one hand. Two offhand: Witcher 2 and maybe Planescape Torment. Fallout as well, perhaps. Point is, players are often forced to perform a pretty heavy amount of suspension for the sake of the writers excuse to cram a story full of optional side objectives. This is a hazard common to video games in general and one that game writers really need to work out, so I won't hold it to any one game in particular.
If you're gonna shun good games for this reason alone you're severely limiting yourself in terms of good games worth playing anyway.
It isn't too terribly difficult to imagine ways to write it off in BG though, since you start off not knowing anything and much of the narrative is investigative work. It is conceivable that you could spend a brief moment helping people as you go because you're not really sure what it is you're doing anyway other than pursuing a series of scant leads. It's harder to stomach in BG2, however, when you're given the pressing objective of saving a loved one who is in immediate peril. It sure doesn't help matters that quests run up and introduce themselves unbidden, each one vying for your attention and only for a limited time. Really, if the matter of sidequests is a big issue for anyone, I would suggest avoiding BG2 like the plague. It's a mess in that respect.
In fact, of all the games I've listed where the sidequesting makes sense in context, they all share one thing in common. The main narrative is all about investigating to uncover secrets. Geralt's/Nameless' amnesia/assassinations/water chip/mutants/GECK/Dad/Benny, etc. It is easier to believe that your character would do all sorts of things in between uncovering the next lead.
BLT... Who on earth ruins a good bacon sandwich with lettuce and tomatoes? Anyway, on to the post.
I'd argue that (1) there are a number of videogame stories that have attempted to remain internally consistent with the game mechanics, and (2) just because games have had a nasty habit of doing it in earlier games doesn't mean it shouldn't be called out as the storytelling defect that it is so that designers can know better next time. After all, it's only through developers learning how to do things like not screw up the narrative that games can evolve as an art form. That said, I'm not churlish enough to avoid old games because they indulge in this sort of thing, since most developers back then just didn't know better; however, I did wind up giving up at BG's ending battle because of various other reasons, including but not limited to the fact that refusing to do all those ostensible "side quests" now meant either grinding or giving up.
As for your examples of RP reasons to do sidequests, you'll notice I didn't bring up Fallout or PST, but instead brought up the Witcher, Neverwinter Nights 2, and BG. That's because I agree with you about PST and Fallout. There are absolutely good character reasons to engage in sidequests, both in terms of RP (get evidence of your past/water chip location and mutant factory) and narrative (by both fleshing out the universe and exposing the player to various instances of recurring themes, particularly in PST). I don't buy it so much with the other games, though. Geralt is an amnesiac by virtue of a near death experience, and not once did I ever get any indication that someone was going to spill the beans on my past only after I fetched them a bouquet (and proceeded to shag them, as the case might be), while the more pressing concern of the missing mutagens was far more urgent and one I had solid leads on, thus killing any necessity of searching for more. Same with BG and NWN 2; the main plot never exactly was skimpy with doling out breadcrumbs, so not once did my character ever think that now was the time to start chatting up the locals for intel and work.