Let's start with where Bioware went right when it comes to story. Some of the new companion characters and the NPCs are quite good. The Welsh-tongued Merrill - an Elven bloodmage - is a wonderful character, and her story arc was the more memorable of the side quests. I also couldn't help but like the carpet-rug-of-a-chest charming Dwarven rogue Varrick=, quick with a wit and his shotgun-like crossbow Bianca. Some of the other companions (more on them in the not-so-good section) have some redeeming qualities or amusing dialogue or quests. The other good part of the game is the excellent background information provided via the Codex entries (the character's in-game journal), and additional background information revealed through inter-character dialogue. I was particularly happy to see more information on the intriguing Qunari race and culture. Some of the NPC dialogue in the game is very sharp - I particularly liked the writing for the Viscount of Kirkwall (the city where the bulk of Dragon Age 2 takes place in). The main plot is for the most part a huge disappointment, but parts of it were well-written and frankly would've made a much better main plot than the actual complete plot of the game.
And then the storytelling begins to break down.
I have a strong feeling that Bioware - drunk with success of Dragon Age 1 and Mass Effect 2 - went on a creative spree, and then got bogged down in committee politics and couldn't decide the story idea to go with. So they picked three (or four or five - depending on the interpretation of the Dragon Age 2 plot) ideas and mashed them together hoping that they'd get an epic story out of it. Sadly what they got instead was a disjointed weird mess that never succeeded in really gripping me and getting me interested in the ultimate fate of the characters and the world. It did not even significantly advance the plot of the series. Some of the Downloadable Content (DLCs) for the first Dragon Age, and the Dragon Age expansion, did a better job of that, than the entire Dragon Age 2. Bioware went with an idea that once seemed very fresh in gaming, but now seems to be getting a bit stale - the game is a story told by a character in game (not by the main character, however, like in Prince of Persia) to another character. That allowed Bioware to do a lot of fast-forwards, by as much as 3 to 5 years at a time. Unfortunately what it resulted in was a disjointed and stunted story that fails to engage the player. Just when you think you're getting a handle on the story and the characters the story ends abruptly and a new one begins, and the time in between is not adequately explained. In fact, I would say that most of the character growth happens off-screen, and that brings me to the next strike against Bioware.
In the first Dragon Age I could create my own character, give him the name I wanted and generally make him a blank canvas (aside from the opening background adventure). In the second Dragon Age, however, the character - named Hawke - already has history, family, friends, and rivalries. Bioware clearly wanted to duplicate the tight storytelling of Mass Effect with its use of Commander Sheppard, with the decision to replace a player-created character with game designer-created Hawke. However, the travails of Hawke and his/her family just never really engage. First of all, everyone in the world seems to know more about Hawke than the player does, and much of the dialogue is incoherent, incomprehensible, or flat out boring as a result. Secondly, Hawke does not really grow as a character, and the decisions that Hawke does make just don't seem like the decisions of the player; I couldn't shake the feeling throughout all 40+ hours of the game that I was just along for the ride because Bioware wanted to make a game with a fully voiced dialogue. Thirdly, I just couldn't bring myself to give a damn about Hawke or his/her family and problems. The family members either spend most of the time off-screen or are flat out annoying and unlikeable. Hawke's problems seem rather illogical and forced upon a player. After Act 1 of the game Hawke becomes very rich - surely s/he can just choose to leave Kirkwall with the family now, but oh no the writers don't even give that as a dialogue option! The character - and the player by extension - is simply not given an option to contemplate that there is another way the character's problems can be resolved! Very sloppy and ham-handed writing guys, seriously.
Finally, while I did quite like Merrill and Varric, other companions, however, were far more lacklustre, and felt more like cardboard cutouts with cliché-ridden quests for the most part. An ex-slave Elf with anger management problems, an asshole younger brother (or a slightly less bitchy younger sister option), an honour-and-justice guardswoman, a sex kitten pirate lass, and a certain apostate mage from Dragon Age making an appearance. Hrm, I think I have seen characters very much like these in... wait... I'll remember... Oh that's right! Every other Bioware game all the way back to Baldur's Gate! Some of these have some redeeming qualities (Isabella is at least hot and has actual character growth, Aveline is hilariously bad at wooing a fellow guard), but these are not frequent. Some companion stories and quests never actually get resolved (here's looking at you Fenris who exacts his revenge and yet doesn't really change in any meaningful way, and Merrill who just seems to shrug off the terrible tragedy inflicted on her), but I was most disappointed with Anders, who was one of my favourite characters from Dragon Age. It's not the fact that he comes out of the closet in Dragon Age 2, it's that he loses anything that made him a fun and interesting character in the first game, and instead he becomes a dour, whiny, and unlikeable would-be rebel. The rather abrupt and annoying plot twist at the end helps transform Anders from a likable and interesting character into a total prick whom I was happy to dump (as a party member and um - more).
Finally, as much as I have already said about the overall story, and how disjointed it felt, I have to single out the ending of the game in particular, because it sneaks up on the player with little build up. In fact, it's fair to say that the first two acts of Dragon Age 2 have less overall impact on the end of the game than a few seemingly innocuous quests. And the two big reveals at the end (yes there are two, and a disappointed groan was my response to each WHAT A TWEEEST! reveal) were so ludicrous that I am very tempted to dismiss these as massive exaggeration on the part of the character who tells the story of Hawke, rather than events that actually happened. The cherry on top is that the game actually ends on a "Ooooooh, there's something mysterious going on and it's linked to the Warden from Dragon Age 1 and is so mysterious that we cannot possibly tell you more!" I, however, basically felt that the 40+ hours I sank into Dragon Age 2 were completely wasted and did not advance the story of the series one iota. This game might be played as a feeling of completion ("Hey, I played Dragon Age, so I should play Dragon Age 2 as well"), or for the gameplay (which frankly has its own slew of issues), but sadly - unlike other Bioware games - it shouldn't be played for the good story.