I actually have several of Banville's (the author of this piece) own novels sitting in my backlog. A few skims confirm his work is quite interested in psychology as the novel can render it (all his work that I have is in first person), so it's not too surprising he'd focus on that aspect of James's writing.
I'd wager James's central contribution to literature was his intense craftsman's devotion and concern for the construction of the novel as an aesthetic object and his firm conviction literature could be an artform and not merely the stuff of adventure tales and parables--his literary criticism and prefaces to his own works are perhaps even more important to the development of literature than his stories.
One ends with Henrietta telling Caspar (in a Graduate Hollywood sort of ending)
“Look here, Mr. Goodwood,” she said; “just you wait!” On which he looked up at her.
http://www.bartleby.com/ebook/adobe/311.pdf
The other continues:
On which he looked up at her-but only to guess, from her face, with a revulsion, that she simply meant he was young. She stood shining at him with that cheap comfort, and it added, on the spot, thirty years to his life. She walked him away with her, however, as if she had given him now the key to patience.
http://www.planetpublish.com/wp-content/uploads/2011/11/The_...
Even James can't figure out what he wants.
Only later did I realize it wasn't a parody. I was horrified.
The less said about Portrait of a Lady the better.
I kept reading him, though, and loved Washington Square. Hated Daisy Miller. The Aspern Papers was fun if not really very good. I'd started reading The Liar and it was very promising, but one of my kids ruined my copy before I finished and I haven't gone back to it yet.
TL;DR give him another try, TTotS isn't his best stuff, and his quality's kinda all over the place.
My experience of Frankenstein, though (if that's what you're talking about with Shelley) was that it was almost (almost!) entirely ineffective as horror, and is held up mainly by a couple of really good chapters that basically lacked anything horrific or frightening. If I'd approached the book without preconceptions I'd not have been likely to firmly categorize it as horror, I think. It's more like a Greek tragedy with a shifted setting (which is more than hinted at in the full title) and even the other members of that category that contain monsters aren't usually considered horror. I'd probably have placed Frankenstein outside of horror, as more of a Greek-mythology throwback tale, had I lacked the existing bias of "Frankenstein is a horror-genre thing".
I think you're pretty spot on and fair to the book though. If you're reading Frankenstein and you're expecting a thrilling horror novel then you may be disappointed. If you're interested in the ethical questions raised by the creature being created, abandoned, and left to deal with it's strife over having no companion... then I think it's a pretty great read.
> I must admit that at the time I was not overly impressed by The Turn of the Screw.
So you may want to try others. I read his The American a few years ago, and liked it overall, despite also feeling that it was sort of predictable and not all that interesting. That said, I'm pretty confident it would have been much more remarkable at the time, but in part because of the influence of James' writing we have grown up with what he was doing developed over another century or so. And even then, The American definitely held some insights for me.