"What do readers expect, and what do they want?" I think this is well put. Whatever readers "expect," it's probably different from what they "want." I agree with Gonk in that writers should write what they need to write and readers may be surprised by reading something they didn't even know they wanted.
I don't expect or want anything in particular going in other than "greatness." However, looking back on what I have liked, I can at least mention some features. (And I should say that I'm actually primarily an SF fan, so may be an outlier when it comes to fantasy in general).
It seems I was looking for stories that were fiercely imagined and had a vivid intensity to them. If not that, or in addition to it, the stories which stuck out had human feeling or "philosophical" depth or vivid characters. Another important thing is tricky to pull off. I like fantasy stories that are different - stock wizards and stock dragons don't generally do much for me. But I'm also really tired of "postmodern" fantasies which "cleverly" up-end the stock furniture or make fun of it or say, "Look what I'm doing." Rather, come at it sideways and make it new or just come up with fresh stuff in general. And this gets back around to writing what you want. If an author is writing stories with their own imagination and their own voice, it'll be like a fingerprint which will set them apart. And those will appeal to some and not to others but at least the story won't fail by being one too many of someone else's stories. A lot of the success of a lot of stories depends on the stray words, almost between the lines, that the reader never even singles out and whose positive effects the reader may not be able to consciously articulate. This is not a mannered "style" (which often turns me right off) but an innate style which, as I say, precedes the words and springs from the imagination and thoughts and "soul."
Got a little carried away there, sorry. But, yeah, I'm also looking for a lot more action.
I'm reading a lot of stories in list form or that involve surrealistic watercolors or which kind of moan and flop about or otherwise just don't really
move. Fantasy short fiction really needs to be buckling more swashes.
Anyway, if you're curious about concrete examples, you might be interested in this
list of links to my favorite short fantasy on the web in 2017. Most exemplify at least some of what I was talking about. For instance, "Remote Presence" is just another (yawn) ghost story. Except it's not at all - it's not a trite ghost story with sheets and chains, nor a mocking "postmodern" ghost story, but is a very modern ghost story which takes the concept seriously and pulls real humanity out of it. "When We Go" and "The Garbage Doll" and others are intensely imagined. "Crossing the Threshold" is inimitably Pat Murphy and
nobody writes like brand new Ashley Blooms. Few, if any, of the linked stories are overtly mannered in style but few, if any, lack style.
Just this month, I've read several fairly good to very good stories. I don't put "
Mother's Rules for a Burned Girl" in the very top drawer but it is pretty good and nicely illustrates the "make it new" element in that it features a dragon but not in the usual way. "
After the Story Ends" is another worth a mention for twisting the fairytale by perhaps taking a page from Darryl Gregory and being set after the usual story. "
An Aria for the Bloodlords" is one I recommend and is vividly imagined. One of the three best of the young year (the others being SF) is "
The Substance of My Lives, the Accidents of Our Births," which, among other excellent aspects, is exactly what I mean about some of the magic being in this word or that word or between the lines and which develops a unique character with a true voice.