Well it depends on the RPG. When you play an RPG with videogames, there are 3 ways to go about doing it, either playing an establish character with an established personality (I.E. Cloud from Final Fantasy) or by taking an established character and making him/her make choices (Shepard) or by making your own characters. Roleplaying can mean different things, it isn't just you deciding the role for a character, you could also be playing a character's role (if that make since). Look at Actors and actresses. Actors and Actresses have been roleplaying before the RPG genre was even created. When they do so, they tend to play an established character with established dialogues and so on. That is a form of roleplay.

Consoles and PC RPGs over the years have developed another form of Roleplays where we get to choose our charactrer's their traits, and the way we play them. That too is a roleplay, though one with more freedom. Lately we have been getting a combination of what I been talking about, Established characters with choices we can choose to make for them. Do I think it is hurting the RPG industry? Nope, if anything it is adding more variety to a genre that sometimes take too long to improve compare to the other gaming genre. It just another way to play games, I don't forsee all RPGs going towards this route (Look at the Elder Scroll series for example). There's just as much room for these type of games as there are for the other tradition ones we're use to. I welcome having MORE options in how I play RPGs.