Saying LCD is bad for pinball is like saying 3D visuals, HD visuals, and motion controls were bad for video games. While that last one might be debatable with hard core gamers, there's no doubt that the motion control movement put more video games in the hands of people than ever before with the Wii. 3D and HD have increased the development costs and time it takes to develop games, but some of the best games ever to be made in the history of video games have been born from those technological advancement. Perhaps part of the reason that new games with LCD displays have fallen flat is because they really don't do much more for gameplay than a DMD does.
I think it's up to the manufacturers now to do something creative with the displays in pinball now. Instead of rushing out games, they should take their time to experiment, deepen the code, and really put more time into development. William's experimented with an interactive display back with Pinball 2000, and I thought despite it's shortcomings, their presentation still holds up well today.
Really, I think LCD displays are here to stay, and they're the next logical evolutionary step for pinball. Designers just need to spend a little more time with them to use them in a way that wasn't possible with DMDs.