I wish I had better tools to understand some of this stuff. My training in the English Arts is pretty limited. I'm interested to see how you divide the stories between lj-house and postmodernist.
Let's talk about crack!fic, first, though. Generally I suppose it's a "I know it when I see it" sort of thing, and the common definition is that it is something written that is so outre it is as if the writer is on drugs, though presumably really not taking any actual medications or drugs (and not just regular old cocoaine, but the more potent and dangerous form that is "crack"). But is well-written stuff still crack!fic if it involves tentacles/unicorns/whatever (obviously not Harry Potter fandom or the like)? Or is crack!fic more about the idea of something cracky happening regardless of writing proficiency?
But as for OCs...I'm definitely part of that trend. I am so loving OCs lately! And Chris writes awesome OCs, which seem to be really enjoyed across the board. And Tessa writes great OCs. And Sharon, too. So, while I can understand the wariness (and weariness *g*) of the Mary Sue/Marty Stu OC that I've seen about a little bit (and it is hard to tell sometimes, since we seemed programed now to say any relationship of a beloved character with an OC is instantly suspect) I think that overall that OCs can be such a good, good thing. It always comes down to the skill of the writer.
When you say no longer a continuation of good writing -- do you mean that we have more bad writing than good, or good writers dropping out, or less serials, or what?