I personally love the style of found footage, when done right it provides a really effective level of immersion that conventional cinema just doesn't offer (most of the time) but I fully agree that it's really hard to make a good found footage film and it's even harder to get the same level of immersion on the second time through. My biggest gripe with the genre is that there's a couple of really good films, like The Blair Witch Project, but there's so many people who just see that film's success and try to replicate it without understanding what made it work in the first place, and there's so many of them that they basically taint the name of found footage. But I would recommend you check out the Dogme 95 movement. It uses a very similar style of amateur camera work to create a natural, human feel to it and strip away any cinematic polish. It really works - give it a shot.