I think I'd say that Vai's progress is a mixed bag..
songwriting has definitely improved in my mind. Vai didn't write songs like
Lotus Feet or Principessa during his days with DLR.
tastefulness has increased tenfold. He's more able to use that perfect tone to nail a moment in songs more. "Whispering a Prayer" is a great example of using the right tone and the right effect, as opposed to using a trick just to use it.
technique is holding steady. I think Vai's still one of the more interesting and fluid players in terms of legato and vibrato.
speed is definitely an area he's neglected. I think it would be stupid to believe Steve is incapable of playing as fast as he did in the past, but he definitely seems to have backed away on it over the years. ALS is packed full of exceptional playing, FireGarden has it's moments, despite several unimpressive solos. The Ultra Zone is mostly unimpressive, except Windows to the Soul. Though I love Alive in an Ultra World, it's largely devoid of much technical difficulty. On the newest album, only Freak Show Excess really breaks the mid-tempo range.
And there's something else missing, I don't even know what to call it except transcendence. When I'm listening to "Juice" or "Slip of the Tongue", the song grows and develops during the solos. "Juice" goes from a typical hard rock boogie to a hyper-active buildup that I enjoy tremendously. The same is true of "Tender Surrender" and "Slip of the Tongue" in that the solos don't just serve as a chance to show off, but they really make the song more interesting and they raise it to a different level. I think that's really missing in his newer stuff.
More than anything, I really think Steve should get back to basics. Drop the goofy story lines and the singing, turn the synth off, and step away from the MIDI. Just get your guitar and your amp and your old
rack system and remember what made you famous- absolutely stunning end-to-end lead playing, exotic and obtuse melodies, and a sense of humor.