Quote for emphasis. Holy shit Bloodlines ruled.

EDIT: I still kinda liked Mirror's Edge.

Another thought, though this has less to do with squandered potential and more to do with possible potential of combining two genres:

Overlord 2. While the game is pretty fun in taking the role of an evil overlord and directing your minions rather than doing all the hard work yourself, the game is just too linear. With the exception of going back to old maps [because you have to] with new minion types, there's nothing to explore.

Though the game itself could do with simply being expanded more, I'd like to see that kind of gameplay combined with another cult favorite: Dungeon Keeper.

You begin either as a physical being (e.g. the same method as Overlord) or a presence or "force" (e.g. like Dungeon Keeper) in the Netherworld. Your first task would be to either usurp or carve out a place for yourself to begin your quest for control, which would become your prime dominion for the remainder of the game.

The world you desire to conquer is divided into territories. In each territory you must first establish a base underground, occasionally raiding the surface for supplies, in a Dungeon Keeper style gameplay. After suitably strengthening the rift to your dominion, The Overlord (you) would manifest physically in your dungeon and lead your forces onto the surface. This would be an Overlord-style above-ground gameplay in order to finally capture or destroy the local place of resistance, probably involving the same kind of puzzle-solving miniquests you saw in Overlord itself. In the early game these would be simple villages, but as you progress, become forts, castles, or whole cities, requiring more advanced tactics, use of spells, and specialized minions.

There's a lot more to expand on there, but that is the jist of it.

Mostly, I think I just want another Dungeon Keeper game.