I actually work in the film industry, and from what I've seen, shakey cam has gotten popular (at least in part) because it's cheap. Cranes and dollies are expensive pieces of gear, so when a DP tells a production manager that they don't need one, it's music to their ears. Professional steadicam operators are also expensive--most shows won't hire a professional steadicam operator for more than a day or two. It also saves on labor costs, since having less gear means that the production needs fewer grips to manage that gear. It also allows the production to move faster since the crew isn't waiting on the grips to set up a dolly track or crane, and saving shoot time saves labor for every department.
Personally, I hate the steadicam look. Some people say that it's "more immersive," but it looks extremely unnatural. Our anatomy and visual acuity tends to make things look level and steady, even when our bodies are in frenetic motion. Take a quick jog around the block and look around at several different objects quickly--things don't look like shakey cam just because you happen to be moving or changing the focus of your attention quickly. Shakey cam looks like someone that can't hold a camera steady (and in professional films, looks like someone who is too cheap to hire a steadicam operator or get a crane or dolly).
In short, shakey can absolutely ruins movies for me. It looks unnatural and inexpensive, especially when someone on a multimillion-dollar film can't srping the greenbacks to rent a dolly. But then again, these folks are making multimillion-dollar pictures while I work on movie-of-the-week stuff and direct-to-video releases, so make of that what you will.
When I direct, I try to get classically-trained instituional mode DPs. I'm probably one of the few people in the world under the age of sixty that still shoots a master shot then breaks up the coverage... Most people my age don't even storyboard or come up with a shot list any more, they just show up and shoot "what feels right." That sort of attitude also contributes heavily to the use of shakey cam.
Lens flare is also gaining popularity, especially with shakey cam, because it makes convenient points to edit. You can cut from shot-to-shot around the lens flares and (theoretically) the flare is distracting enough that the audience doesn't notice the edit. I personally think of lens flare as a technical error, but it somehow seems to be a badge of honor amongst those seeking an "indie" or "young" look for their projects. People are even deliberately adding lens flare into CG scenes to make them "more realistic."
One last deal, as long as I'm griping about technical minutiae... The use of soft focus is also way overdone. Soft focus can be used effectively in a dramatic context, but using it all over the place makes it look like the DP or director didn't want us to see something in the background (at best) or that the 1st AC doesn't know how to pull focus (which makes the shot look cheap and amateurish).