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I think found footage can be an okay way to style a horror movie, Blair witch project (I think that was it) comes to mind. The problem is that the style is more over saturated than a cake made of solid fat covered in butter.
When done right, found footage can be a cool technique. But I've only seen it done correctly to beneficial effect in movies like Blair Witch, Chronicle, and Noroi:The Curse.

Seriously, you guys should check out Noroi. Japanese found footage horror that has some cool stuff in it. Pretty good.
 
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