I know I'm bumping a sort of dead thread but this seemed like a fun one so I thought I'd give it a try.
Not ranking: Gen 1 (too simplistic, I have an Odyssey and I find it very cool to pull out and mess with for a few minutes now and then but it's nothing I can sit down and play for hours today. It's easily last if I'm ranking it)
Gen 8 (too new. It would rank 2nd last I suppose if I did include it, though a lot of great 3DS/Vita/Wii U titles help they can't compare to most any other generation)
For the 6 gens in between, let's do this:
6. Gen 7: Everything I hate about gaming kind of took over here. I'll start by saying that my favorite genre of gaming is the turn based JRPG and they pretty much died. I don't like downloading games, I don't like DLC, I hate that cheat codes and unlockable content have basically dissapeared (due to online gaming and DLC respectively). The lack of local multiplayer kills me. I hate that online multiplayer is the focus of so many games. I don't like that smaller mid tier games pretty much dissapeared. Every game wants to be the next Call of Duty. Don't get me wrong, there are some amazing games. Fallout 3 is top 10 all time for me. Xenoblade Chronicles is beautiful. Uncharted 2 is amazing (I'm not totally down on AAA games, just that every game wants to be that. When done well they can be great but there needs to be more variety) The DS/PSP are fantastic systems. There's plenty to recommend here. I like an awful lot of games from this generation in fact, but there's far more to dislike about this generation than any other for my money.
5. Gen 2: Primitive but for me these games are infinitely replayable. They're just deep enough that they can still be a lot of fun. I'm not going to sit with 1 game for hours and hours, but I can switch games every 15 minutes and keep having fun. I love the Colecovision, the 2600, the 5200 (especially games that support the track ball), the Vectrex, all beautiful systems. Simplicity is not a bad thing, I think modern gaming could use a real hit of simplicity in fact. The problem as others have mentioned is just how much crap there is. There's so many bad games in this era. The great ones stand out and have stood the test of time but you do have to do a bit more research on average. Then again, the ratio probably isn't any worse than any other generation between bad and good games. It's just more of the bad games are truly terrible. There's just as much junk PS1 or PS2 games but the average junk PS2 game may be a 4/10 or a 5/10 while the average junk 2600 game is more likely to be a 2/10. Still, a bad game is a bad game.
4. Gen 3: This is where it got hard for me. I truly love the remaining 4 generations. Still, NES games on average don't quite pull me in. As I mentioned earlier, JRPGs are my favorite games and the ones here are a bit simplistic still. If you love platformers this is the place to be but I've never been a huge platformer guy. Still, despite this there are tons of games and gaming took a big leap forward here for sure. The NES library is awesome and the Master System also has some great stuff. The 7800 is alright though probably Atari's weakest system. (yes, below the Jaguar for me) The other thing holding this generation back is that we only have 3 real systems to consider, the smallest assortment of any generation. (largely due to the crash convincing most companies to abandon gaming and it taking time for many others to come back in and try again for gen 4)
3. Gen 6: My favorite system of all time, the Dreamcast is here and that makes it hard to leave it so low. I actually almost moved this to 2nd, but I think this is the right spot. All 4 major systems, plus the GBA and Neo Geo Pocket Color are awesome. The Xbox is highly underrated and has a ton of great hidden gems. Sega's output for the system is outstanding (almost giving it a Dreamcast 2 feel) and Nintendo was making great games on the Gamecube. The PS2 is a great system but actually may be what holds it back. It's funny to say considering I own 296 PS2 games (the most of any system) but it's probably my least favorite of the 4. The PS2 has an absurd amount of good games, probably the most of any system ever, but very few great ones for me. It was a system with an absurd amount of 8/10 quality games but not that many I'd give a 9 or a 10. Outside of Shadow of the Colossus, Ico, Persona 4, Suikoden V, Final Fantasy XII and God Hand I can't think of another game I love on the system. That said, there's so many cool and interesting titles that I'll probably find more, there's still way too many games here I haven't been able to put the time they deserve into.
2. Gen 4: Now we get into true greatness. The SNES and Genesis is probably the closest matchup of two great systems directly going at it ever. Both have so many amazing games and both excel in different places. Then you have all the wonderful Sega CD RPGs. You have the Game Boy really getting handheld gaming going as well as a few okay Game Gear games. You have the Turbografx 16 being an amazing niche system if you enjoy the right genres. You have the Neo Geo bringing arcade gaming home and making some world class arcade style games. Funny enough, everyone loves the SNES RPGs and there are some excellent ones but I've always actually preferred the Sega RPGs of this gen. I'll take the combined library of the Genesis/Sega CD for RPGs over the SNES any day.
1. Gen 5: It was rough reading so many people hating on this gen here because it's easily my favorite. People give it crap for not holding up but I just can't agree with that. Oh sure, the early 3D graphics are a bit jarring today. But spend 10 minutes with the game and you mostly get past that and there are tons of games with great gameplay that are still a blast to this day, in all genres. Nintendo was cranking amazing games out left and right here. Really though, I'll admit, what makes this generation for me are the RPGs. The PS1 has the best RPG lineup of all time and the Saturn chips in a great lineup of them as well. The Game Boy Color rejuvenated the Game Boy and you even get a few nice games on the 3DO and Jaguar. Heck, even the Virtual Boy has a few good titles.
I think it's just a question of which RPGs you value more. You've already said that that's the genre that really does it for you, so seeing the PSX generation on top of the list is no surprise, or even controversial if that's how you want to weight it. It's our own personal lists, after all!