I think I'd like to somewhat reinterpret that one line. "DPC is a bad writer, but a great storyteller". I feel like those mean the same things.
To me, it's more like DPC is great at writing short, impactful scenes and using the VN medium to his advantage when doing so. I just don't think he can handle overarching plots well. You can tell he has great ideas (is this what you mean by storyteller?) but the details and foresight kind of get lost in the weeds here.
It's like he has point A and point C already in his head but when it comes to writing point B, he falls short and things start to not add up or feel contrived. Along the way from Point A to B, he realizes that it doesn't work and is even unsure of Point C now. I feel like we're at Point B for a lot of these story lines.
I think it's why you get some great scenes like when Sage tells MC about being adopted but also stuff like MC being angry at Maya and Josy for no real reason in Ep 3 and 4 or the "fuck fuck fuck" thing at the end of Ep 8 regardless of what you've done on your run.
He's probably already had ideas for those specific scenes and then some chunks of the overarching plot here and there but can't keep things consistent when it comes to writing details for those big ideas or how one scene's writing will affect the subsequent scenes. I don't blame him. Few can do such a feat. But that ultimately determines whether it's a story that can stand on its own without the lewd scenes or it's just a really good VN.
He also does a great job at building up his characters ... only to bring it all crashing down in later seasons. You can say it's because he's showing that the characters are opening up more or are maturing but it just feels like weak writing/downgrading his characters to me. (Also not likely but still possible, even letting outside influences determine what the characters are like)
To that, I second what felice said about the improvisation. Kind of feels like it sometimes. Especially after Season 1.
I'll explain what I mean.
A good storyteller and a good writer are not always the same thing. A script is roughly speaking a story on the basis of which a game is created. And gameplay is the way the narrative is told.
If we take the script out of the game and read it, we will immediately realize how boring and poorly written it is. But we don't notice it because DPC is skillfully controlling the attention and manipulating the players. The game has good music, freeroams which are corridor mini-levels with elements of sandbox, good dialog, interesting characters, mini-games, there are elements of trade, player base where he rests between levels, elements of social interaction, high variability, replayability, etc. All of this allows us to overlook the obvious plot bloopers. If there weren't such long pauses between games, no one would pay so much attention to obvious plot errors like Maya's loan or Jill's picnic.
Narrative design, level design, world design, content design, etc. is done at a good level that keeps the player's attention for the maximum amount of time. But the scripting is pretty poorly written.
To illustrate, I'll give examples of games that have both a good story and a good narrative and games that have a good story but a bad narrative.
An example of a perfect balance is City of Broken Dreamers. An example of a good plot but poor storytelling is The Order of Genesis. It has an intricate and interesting plot, but boring characters and boring dialog.
You're right to point out that he can't link A to C. A problem I also mentioned a long time ago. DPC works according to a flowchart and working on this principle it is much easier to make a mistake than to work according to a ready written script. DPC is really a master of mise-en-scene (if you can apply this term to the game). He has an excellent written and staged scene of the meeting with Zoey, which allows you to feel a wide range of emotions. But in the same episode there is a weird storyline with Sage where MC feels guilty whether he fucked Jade or not.
The upshot is pretty simple. DPC needs to abandon the flowchart and come to a traditional way of writing. It will save him time and the plot will be more meaningful.