If you phrase it that way, it sounds worse than it is. The progress is not that the literature is morally worse than it was before, it's just that LDS fiction has a wider scope -- where all LDS fiction used to be inspriational, now, it can include books that are more mainstream, but better marketable toward an LDS audience. In other words, we can write stories that exist in an LDS environment, but that environment is not the focus of the book. It really opens up the spectrum of possibilities for the market.
Compare it to fantasy (since this board is very fantasy oriented). Imagine if all fantasy novels had to be about clerics and paladins, and not only about them, but focusing on their beliefs. It would seriously hinder the kinds of stories you could tell.
Now, one concession that I'll make is this: you're right on the button in reference to recent Anita Stansfield stuff, or even Richard Paul Evans. It seems as though, since LDS books have always dealt with moral issues, these authors see "progress" as dealing with immoral issues. I think they're just married to the "learn a profound lesson" concept, and can't get out of it.
But, on the other hand, there have been a lot of new authors that successfully use an LDS setting without getting too preachy: For example, Dangerous Games by Keith Morris is a kind of FBI techno-thriller, except it is based on the Church's security service.
Personally, I'm pleased as punch by the new directions. There will always be people like Stansfield who try to push the envelope, but, really, I didn't like her syrupy romances even before she started writing about fornication. Just sayin'.
