Denethor's madness.

[King of the North]

Right from the get go when u first meet Denethor (TTT EE) he is a bit crazy as he insists that Boromir goes to Rivendell and claims the One Ring for Gondor. By showing from the beginning that Denethor is mad, PJ did not create good character. And if you watch only the theatrical versions of the movies, Denethor is even less interesting.

Originally posted by Tuor of Gondolin
There was no character arch, which even movie Faramir had, to some extent.

Very true. Movie Denethor did not go through any journey and essentialy remained static throughout his entire role in the movies. The death of Boromir only contributed Denethor's insanity, but it did not start it because as I stated above, the Steward is somewhat insane from the very beginning. In the movie we never see the good leadership qualities that Denethor had in the book until he lost his mind to the Palantir.