I couldn't disagree with you more. A Christian song does not need to cover the events of the entire Bible. Each one picks a tiny part or concept from within the message. It is not watering down, it is focusing, just as Jesus and all the books and chapters of the Bible do.
Even in the Psalms there are lots of songs about a lot of subjects. And the spirit of the songs in the Psalms can be found in the words of both Hymns AND contemporary worship music. And some songs within both genres are sterile as well.
The genre is not the problem, the individual song and/or individual performer is the problem.
Like a good sermon, the Swithfoot song "Meant To Live" opens up a cornicopia of questions when presented in an open environment. Questions that have their answer in the Word of God. And the doorway to the answer is often opened in the non-believers hearing of the song.
That is a good thing.
The Psalms discuss lots of different topics; it seems like modern praise and worship only talks about the Cross (and in a very shallow level without fully explaining the ramifications of God coming down in human form to die).