On a purely pragmatic level, you can't serve two masters at once; either the Story is paramount, or the Game itself (that is, emulation and immersion) is paramount.
If you make the former paramount, then the rules are ultimately meaningless, characters are meaningless, everything about the game is futile except inasmuch as it serves to promote "story". Character protagonism becomes meaningless (and player protagonism with it) because these only matter and should be allowed as long as they serve the Story. If something a character wants to do (or a player wants his character to do) would reduce the experience of "creating a story", it should not be allowed, and thus in a story-focused game any sense of protagonism is an illusion.
Emulation of the world becomes meaningless, the point is no longer to create a world that is internally consistent or that feels real, except when and if this contributes to the sense of "dramatic agenda"; at any other time, it must be discouraged, particularly at any time it enters into conflict with the sense of dramatism of the Story.
The validity of the rules themselves become meaningless; if it doesn't serve the Story for a PC to be killed in a random encounter with an Orc, then this is to be ignored for the sake of Story. Thus Immersion becomes impossible; you know your character isn't a flesh-and-blood person living in a virtual world, he's a character in a novel, who will do what is dramatically interesting, live for as long as it serves the story, succeed if it serves the story and fail if it does not.
On the other hand, if you put Emulation first, then whole idea of "Creating a Story" becomes meaningless. It takes second place to all the things mentioned above, and any story that is created is entirely a byproduct of Emulation and Immersion. Its like when you go fishing: you don't go fishing to "create a story", you go fishing to go fishing; occasionally, a ripping yarn gets created as a result of that fishing trip, but its not the GOAL. More often, you get an experience that is fascinating to you and to those involved, but utterly not-fascinating to any other poor bastard who has to hear your "fishing story", in precisely the same way that most people's stories about their PCs or their Campaigns are unbelievably dull to anyone who wasn't actually there but is forced to hear about it.
The reason for Immersion isn't for "story to be told", in fact, as outlined above, Immersion becomes basically impossible if you try to make that the goal. The point of Immersion is the point of RPGs: to bring to life a person living in a virtual world, and to incarnate as that person for a while. When run properly, RPGs are very good at that. On the other hand, RPGs are utter shit at being methods to "create story". Ironically, so are Storygames; which, as I pointed out above, is why Harry Potter or Twilight Fan Fiction are unbelievably popular, while the Forge and its games was a failure.
(Originally Posted June 6, 2012)