I disagree with this pretty strongly.
First, I don't think there's a problem with having a challenge in the gameworld that the PCs have no realistic chance of solving. For example, returning Athas to a world of life and greenery is a perfectly good character motivation, but I see no reason why such a task should be solvable at all, not to mention solvable with character abilities.
I think most everyone here is talking about challenges that are
current and in front of the players. Returning Athas to greenery is not a challenge in that respect, just like saying "I want to advance the technology of the area and unlock nuclear power" in Eberron isn't really a current challenge. We're talking about things like the invisible wall, that are presently in front of players and need to be dealt with
right now.
Second, there are tons of fun challenges that aren't amenable to character abilities. I think the plot to the latest Clash of the Titans is a perfectly plausible epic adventure. The whole point is that there's a monster that isn't realistically defeatably by even the most badass heroes. Instead, the PCs need to identify, find and acquire another element of epic magic in the world in order to defeat the otherwise unkillable monster. Obviously, the movie featured one particular solution, but it's a big mythical world out there -- who's to say there weren't others?
Actually, you could completely do this via character abilities...
Roll knowledge check to see what sorts of creatures could aid in defeating the Kraken. Success! Medusa's gaze can turn anything to stone!
Receive Magic Items/Divine Boons (depending on if we're a low magic campaign or not)
Use a ritual to find the location of Medusa.
Skill Challenge - Use Stealth, Acrobatics and Athletics to get close to Medusa. Failure! She's detected you, roll initiative!
Use a combination of various powers and abilities, including some magic item dailies, to defeat Medusa and take her head (which is a Story Item per MME).
Use the story item to defeat the Kraken! Gain 10,000XP!
Lastly, and most importantly, one of the primary joys of table-top gaming is seeing a situation where you have no idea what to do and then finding a way to advance the situation, hopefully for the better. If you check out the most popular story hours on this site, they are replete with challenges that require player thinking as much as character abilities. (Imagine all your PCs wake up with no memories as citizens of a city in a bottle.)
I've played games where it feels like you're just trying to guess what the GM (or module writer) is thinking, and I agree that it can suck. And I also agree that using your character abilities to kick ass and be awesome is a ton of fun. But I wouldn't want to play in a version of D&D where character abilities are the limit of what your character can do, or where player ingenuity doesn't play an essential role in the game.
-KS
You mention how games that break down into "Guess what the GM is thinking!" kinda suck, when that sort of situation is only created in an environment where the PC's can't solve things using their character sheets. Things like Story Items, needing the help of NPC's or the favor of the gods? These
are ultimately still based in a character's sheet. Knowledge checks can reveal information about the Story Item you need, social skills can help you to enlist the aid of an NPC, and accomplishing quests (using your abilities) or using rituals can get you favor from the gods and other powerful beings.
It just takes creative adventure design to bring those things out and get the players to engage more than just "So what's the skill challenge?"... Ultimately though, when you go "Out of Bounds" it's going to cause problems though, because the PC's don't have a map anymore. That's when you're in danger of the guessing game.