What makes you say that? I think the problem here is the game spans three concepts - Create, Play and Share
I didn't see Create or Play in that video. I saw Dressup, Decorate, and Autopilot (and Avatars That Never Stop Shaking). But perhaps this movie is just not a good example.
When I think of creating levels, I think of placing obstacles and interactive objects in the vein of The Incredible Machine or Lemmings. When I think of playing what was created, I think of having jumping and interaction puzzles, not "ride the boat we just decorated".
The movies shown before had all of that - and didn't have nearly as much pointless fluff on the avatars themselves. I can see that they've added a lot of detail to the game since E3, but none of the additions look to have improved gameplay. Maybe I had the wrong impression of what kind of game it would end up as.
Watching that video, I feel like LBP1 should have been released in August with its simple essential gameplay intact, and all of this "Game 3.0" fluff could have waited a year for LBP2 or tacked on as DLC.