I don't think fairy tale-ness is necessarily a bad thing, even when combined with SF; I would argue that one of my favourite stories, Warriors' Gate, manages to tread that line with aplomb, but this just didn't work for me. Too much time was spent on the Doctor apparently working for the monks, apparently just for something shocking to go in the trailers. Too much just wasn't explained. It was too reminiscent of other stories, especially The Sound of Drums/Last of the Time Lords. I didn't like everyone forgetting the Monks at the end either; they were there for SIX MONTHS and apparently killed quite a lot of people.

I completely agree with your final paragraph, except that I would say I was fairly whole-heartedly behind Oxygen and Extremis (despite the former's knee-jerk anti-capitalism which didn't really understand what capitalism actually is (like most anti-capitalists)). I wonder if the three parter would have been less uneven if it had had a single writer?