I've just finished Outlast and it's positive and negative points are still fresh in my mind. I will not attempt a review here, rather I will gesture to some pros and cons. Understand that this is a gesturing-to and, as such, it is not supposed to be exhaustive or deeply explained. I will write a review later on and post a link to it here and in another thread because I think that's important. That review will be as spoiler-free as possible.

Pros:
-excellent atmosphere and environment that is realistic without becoming boring;
-fluid and natural movement, including the ability of the player to see their body, crouching low and making realistic contact with surfaces;
-excellent audio;
-interesting story, where the game doesn't often let up on the tension;

Cons:
-hiding is useful in a handful of situations, as it's almost always more important to run than hide;
-interactivity with the environment is very limited, not in the sense that the player should be able to explore everything -the player is to observe and get out, not explore the entire place- but rather in the sense that the player can do things that are at odds with the narrative. Example: the player can jump and pull themselves up into a ventilation duct but can't hurdle smaller obstructions;
-combat is problematic and regularly breaks the game's narrative. Examples: (1) the player cannot engage in combat and the enemies are vastly stronger (explained in the narrative), but the player can easily evade all enemies and is able to legitimate push back against them in one encounter, (2) the player has infinite health so long as they (a) are not hit with a one-shot item like a blade and (b) find a way to hide and get out of combat for a short time, (3) the player always has an escape route or safe area;
-puzzle mechanics are problematic in that few puzzles seem to be organic instead of put there because 'that's what you do with these games'. In these puzzles there is, as demonstrated above, always a safe area that can be escaped to and is always a blockade that should be able to be knocked down/circumvented by enemies given the explanations that occur in the narrative;
-certain enemies are somehow always able to follow you, appearing in later parts of the game in a way that isn't sensible. This is because, should they be breaking down barriers, the player can logically back-track to the area that was once barred to find their way there with little trouble.

Ultimate Verdict
7/10, sufficiently worthy of play and a truly fantastic first game by Red Barrels.

I understand that this seems to be an odd score given the above criticisms and that such cannot be explained appreciably here. The game is a solid first entry by a technically new developer, despite the team having development experience. The game suffered where it did from a lack of QA (only one person was listed as QA in the credits) and a too-small team that was ultimately unable to experience the game the way a player would for the first time and throughout the game. When design/mechanical problems didn't crop up the game was fantastic, just fantastic, but when those issues did pop up it was a head-scratcher given just how damn good those other parts were.

Except it's not. It's a game delivered through the computer that happens to use a camera because the protagonist is a journalist. Yes, that was the point. It's a subtle and unsettling effect, one that increases immersion. You are also free to turn the camera off if you wish and wander around in the darkness. They could have gone the usual route and have the player reliant on a flashlight but I like this approach much more because a) it makes it possible to see things in the dark without said things seeing you - if they had used a flashlight they would have had to brighten up the dark areas which would have made them considerably less scary or just have the player be completely exposed at all times and turn it into a 5 hour chase scene rather than including tense stealth elements - and b) it's never been done like this before and I like innovation - camcorder horror is certainly not a new concept but the difference is that in movies you are not the one controlling the camera which makes it confusing to watch. I personally liked the score. It's not that great, but it is rather moody and I love the fact that it is played by real musicians (unfortunately rare in video games and some modern films). This is something that needs to become a trend, so even if the music is terrible I endorse it just because I think a studio, especially an indie studio, that is willing to spend money on a decent score should be rewarded. I found the game quite frightening. The sporadic jumpscares were not very scary, in fact they failed to startle me almost every time, but the game is full of memorable scenes that don't rely on jumpscares. I don't mean any disrespect, but I still don't see how you can compare this to a movie. It's highly linear and there is perhaps some handholding but usually when people say a game is like a movie they're referring to games with superficial interactivity and long cinematic cutscenes. And there is nothing wrong with that either - it has been done with great success in many games. Does that mean I want every game to be highly cinematic? No, I just don't automatically condemn it because it's "anti-game" like most people. A little variety never hurt anybody. It's not like interactivity always makes things better anyway.

EDIT: Just so I don't give you the wrong impression, I did not love this game by any means. It has a terrible plot with non-existent characters, is filled with highly questionable jumpscares and has very sparse gameplay. That being said it does a damn good job of engaging you and retaining and uneasy atmosphere of dread throughout. There are moments in the game that I would count among the scariest I have experienced. Anyway, this is just my opinion but I disagree with your assessment. I think you misinterpreted the game completely.