I can like both types of shows. I love Law & Order, which was so plot-driven and episodic that we hardly ever got to know the characters beyond their jobs. I also love Buffy the Vampire Slayer where comments made in the pilot episode don't pay off until the series finale. Both have their pros and cons.
That said, I think TNG was fine the way it was... episodic. It worked well. And I don't think that meant there was no character development. I'm sorry, but the Picard of "Encounter at Farpoint" was not at all the same man as the Picard of "All Good Things..." Events such as his assimilation by the Borg, his re-connecting with his family, his imprisonment and torture by the Cardassians, and his "life" in "The Inner Light" all impacted him over the long term.
Simply because characters did not enter sustained, long-term romantic relationships does not mean that the characters were static or had no development.
I think TNG was a product of its time and I do like the way it is, though it might have been nice if they put more effort into warping plot lines in the 7th season, but hindsight is 20/20.
However I think trying to recreate TNG with a new show would be a bad idea, that is what Voyager did and it didn't work. A new show would have to have more of continuing story. That is the way the TV landscape is moving towards.