I like almost anything that takes multiple good things and mixes them well. I like Pizza, programming(a blend of science and art), cross-genre music, a well color coordinated room, and I like action RPG games. But what makes a good action RPG tick? Why do we all love them so? Why must so many articles and analysis' start off with a bunch of questions?
This may be a bit subjective, I.E: why I love action RPGs, but I highly doubt that this won't produce fruitful game design ideas and knowledge.
The draw of an action game is pretty simple and obvious. Well designed action games have mechanics that are inherently fun and gratifying to play. However, not everyone enjoys action games. Sometimes this is because of the challenge or pressure, and sometimes a set of shooting mechanics just gets old quickly for some people, and no set of action mechanics-no matter how excellent-is going to be fun for every person on earth anyway.
RPGs on the other hand usually provide challenge and pressure that matches the level of the player. There can be interesting experimentation to decide on how to roll your character, which quests to go on when, etc. And let's not forget that RPG's also tend to have heavy emphasis on story and writing, often leaving them with much better stories than what you normally find in an action game. However, videogame RPG's usually suffer from a set of core gameplay mechanics that fall apart horribly enough that people like me have trouble standing them. It's the grind, emphasis on story, roleplaying, and character development that keeps the RPG alive.
But what if we were to take the gratifying and carefully designed gameplay mechanics of the action genre, the character building/progression and story emphasis of the RPG genre, and mix them together? This is where games like System Shock 2, Deus Ex: Human Revolution, and Mass Effect draw a portion of their awesomeness from.
There are a ton of advantages to a game like this. If you're not in the mood for high pressure, manic shooting, you can explore the world and solve puzzles. If you're not up to handle said crazy shooting yet, you can always take out a different side-quest and go mow down some lower level enemies, all with gratifying action mechanics. If you're bored of moseying around dealing with interpersonal dramas, you can equip your rocket launcher and go have some fun breaking things, but in a way that requires you to think about resource management, strategy, and what repercussions your actions will have on the world. In this way, the game can appeal to a wider audience and keep said audience engaged for longer.
A common difficulty in designing an Action RPG is deciding how to balance these systems and which parts of which systems to leave out or change. You have to know from the outset if your game is going to be an RPG with some action mechanics in it, if it's going to be an action game where RPG elements take a back seat, or if they're going to blend in a more even fashion. All three of these can be effective, it just requires a lot of forethought to get any of them right. It essentially comes down to keeping elements that make the genre's fun, and making sure that none of the mechanics from one genre brake the mechanics in the other genre.
This takes a lot of experimentation, analysis, testing, guesswork, and artistic expression. Kind of like most good game design concepts.