Nintendo, as a rule, is not a company that keeps particularly close to their fans. Though they will occasionally deliver exactly what fans ask for (Mario Galaxy) it almost seems like a coincidence when they do. Nintendo stubbornly follows their own muse, for good or ill. They turned Metroid into a first person game, they made a console with only one analog stick, there are countless examples of Nintendo flagrantly ignoring the demands of their customers to create something they reckon will be better. This is true of their Zelda franchise as well.
Nobody asked for the Wind Waker. Nobody thought Zelda games needed that crazy art overhaul, nobody thought Zelda needed sailing. When the Wind Waker came out in the west, it was met with a hostility no previous entry had been. Now Wind Waker eventually turned out all right for Nintendo - it turns out this was one of the times when they really did know better than the fans. It's now many peoples favorite entry into the series, and over time it sold rather impressively as well.
Nintendo, however, was worried. An interview two or three E3's ago revealed that after the Wind Waker didn't catch on like other entries internationally Nintendo got very nervous about the future of the franchise. I postulate that The Legend of Zelda: Phantom Hourglass is a direct reaction to perceived waning interest in Zelda as a whole. This is because Nintendo did something rather unprecedented in this game, and they listened to their fans. Now this could be coincidence again, but so many fan requests are met in this game that one can only assume the developers had a checklist of features and changes they were instructed must be included. Think about it:
Phantom Hourglass updates the recurring "story" of the franchise in a couple of fan pandering ways. You want a new villain? You've got it. You want continuity between games? Done. You want Link to have a voice? They didn't go quite that far, but the fairy sidekick was quite talkative and brought us closer to this ideal than ever before (or since). Also, Linebeck! Finally, this Zelda game includes an NPC who accompanies you on your journey and experiences his own character arc. He's got his own motivations and his own issues. This may sound mundane, but in the world of Zelda games it was an unprecedented event. Never before had a character outside of the hero, maiden, and villain triangle played such an important role.
Phantom Hourglass addresses the main fan complaints with Wind Waker's pacing. Sailing still isn't the most interesting or dynamic overworld navigation in a game, but it's clear that a lot of effort went into addressing complaints about it being boring in the Wind Waker. There's almost always something to do while on the sea, and you don't need to stop to change the winds either. The much loathed quest for triforce shards that padded out the back end of Wind Waker is gone as well, with all fetch questing delegated to the optional hunt for Courage/Wisdom/Power gems.
Phantom Hourglass is hard! The temple of the Ocean King (the recurring dungeon in this game) catches a lot of flack. Some didn't like the aesthetic, some didn't like repeating sections of it. What I've heard few address though is the fact that the last run through the Temple of the Ocean King is easily the most difficult mandatory dungeon sequence since A Link to the Past. The dungeon is no impossible feat, but the margin for error is surprisingly small. The tricks this dungeon pulls out are nasty! Timed, Stealth, Carrying things that prevent use of items, moving over invisible floors, spy enemies that will teleport a phantom right next to you, the list could go on. Wind Waker is perhaps the easiest Zelda game, and many fans have taken issue with this. Ask and ye shall receive I guess - the Temple of the Ocean King is a brutal grind that requires dexterity and extensive memorization.
So, where does this leave us? What have we learned? I think the moral of the story might be that Nintendo really does know best. Phantom Hourglass is a laundry list of fan requests all met at once and... well, it's not terribly popular. It sold all right, but it didn't set the world aflame. It didn't sell as well as The Wind Waker, nor was it as well received critically. Phantom Hourglass is, in terms of features, perhaps the most traditional sequel in the Zelda series. Why then does it seem like a step backwards?
And before you say it: The touch controls worked just. fine.