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I would not judge LFR from the GenCon experience.

There is story in the modules, and the campaign - in fact one of the story elements has such a good module in it that I have a character undertaking it just because of the module (Zhentarim Infiltration for the established folks).

If you are familiar with the Realms making a character that has cause to dislike the Netherese and the goddess Shar will provide plenty of RP oppoprtunities as well.

The largest trick to playing LFR is you need to remember it is a HUGE even a COLOSSAL campaign, any given module may or may not reveal a part of the evolving story of the Campaign, and then there are the many minor plot threads scattered through each Region and so on... Playing 1 or 2 modules really isn't going to get you that sense of story that is available from the campaign.

Then there are the modules, I've had some great RP experiences, but they are about the people at the table as much as the modules themselves. Sure sometimes you run into situations that just go against the grain or that are frustrating, and when that happens you need to bend to the module because the DM is stuck between you and the RPGA, but mostly the mods are pretty straightforward. A little plot at the start which you can run with or not as you like..

For example there is a module that opens with a RP scene (and skill challenge) where the party needs to disperse a mob (in best Monty Python voices "We found a witch, can we burn her?")

The first time I played the module most of the party went "sure, whatever" but the Good PC talked the crowd around while the thief robbed her house, they managed to just escape with her and her key goods, collect us and get out of town. This encounter set my cleric in her "I don't talk, except with my fullblade" mentality incidently.

The second time I played it we were just busy body adventurers who through knowledge, diplomacy and a bit of bluster got the crowd to hand the girl over with her key posessions before they all legged it away.

The last time I played it my Tiefling sorcerer bluffed the crowd into believing we were magistrates from a nearby city and that we would handle the situation. (Why yes I do believe the DM was going wtf? do I do with that and the 30 he just rolled). In the end we walked away calmly with the girl and the townsfolk all satisfied.

I think I need to play this module again with a lecherous human male character come to think of it....

Overall the module is 3 combats and a skill challenge strung together with a tenuous plot - but if your table is willing to RP it there is just buckets of scope for that to happen. (The first party resolved a later encounter by the expedient of giving the bad guys a bunch of mundane gear...)

With the rewards, think about the gold as the money gathered by selling all that cheap stuff the monsters/enemies had plus whatever reward the relevant parties offered. I'm of the opinion that the DM did you a diservice by preventing you from using that stuff in the module. Why just the set rewards? Because the party is going on its own way afterwards and its easiest to sell the loot and split the gold... if you want that mundane item buy it with the gold, want the magic item take the pick, or save the gold until you can afford it later. This is definately a major part where you need to work t out for yourself so that your characters story makes sense.

That all said one of the cool things about LFR is playing a few mods with the same PCs, going off and doing different mods, then getting back together with them at higher levels and doing the "hey, long time no see" RP - ie the LFR story is what you make it.