While I certainly understand your point, Perdita, different books will engage different people and there are enough points for and against any given novel to write a list as long as your arm to support any given viewpoint; I for one have to disagree with it being the "beginning of the end". I'm of the opinion that he's only just reaching his peak as a writer.
Whilst I loved the machine gun rate of gags and references in his earlier work, along with plots that parodied almost everything of cultural significance in the modern developed world, it was always the flashes brilliant characterization and the streak of cynical wisdom running through his novels which kept me coming back for the next one, I can get gags and parody from Craig Shaw Gardner. I think this element of Mr P's writing is getting stronger with each progressive novel. Some people will love this new direction and others won't. I know I'm in first camp, but understand completely anyone who isn't. I have similar feelings to the ones you expressed about Mr P's writings, about David Gemmell's later works (Troy trilogy excepted.), while other Gemmell fans accused me of being "stuck in the past" and "worshipping at the altar of Druss". Horses for courses, is my way of thinking.
Re Andy: For what it's worth, Andy is one of the most convincing and realistic villains ever to appear in a Discworld novel. I grew up on a pretty rough council estate and spent most of my teens living in fear of the local thuggish psycho. He's currently serving nine years in prison for beating a pizza delivery man half to death with a baseball bat, in order to steal less than forty quid from the poor sod. Andy might be mundane in his villainy, but he's so real it brings up goosebumps for anyone who's had dealings with a bloke like that.