I definitely think more games should try spanning a story over a few decades, it's a great way to see things change and develop.
Yeah. I liked the storyline spanning three generations in Phantasy Star III. Sure, the rest of the game wasn't that great (I disliked the grainy graphics, grainy music, and plodding gameplay) but that multi-generational story was fantastic. I especially liked that the storyline branched off depending on who each protagonist married.
The only other RPG I can recall playing multiple generations is Record of Agarest War 2, and while that game, as a whole, was surprisingly good, I felt that the generational aspect could have been better done. Unlike PhanStar III, the protagonist was always the same regardless of chosen bride; the only difference was in stats. I thought this was a cop-out.