Of course we can. Even people who like found footage movies complain about the overuse of "shakycam" and barely glimpsed special effects. And yet the Wikipedia entry for Found footage (genre) shows a steady increase in the number of these movies being made year after year. They're easy and cheap to produce (I imagine many sales pitches include "...and it makes sense not to have any effects because when you're being pursued, the last thing you're thinking about is aiming the camera.") and they're disposable; audiences would rather stream these films than drive out to the multiplex or have to buy (and keep track of) some kind of disc, which is convenient because streaming is relatively inexpensive. 90% of these movies are forgotten within a couple of years, but 100% of them break even. If they don't, well, somebody spent too much money somewhere. Maybe they hired an actual celebrity when they should have hired bloody Martin Smith from Croydon.
Which is not to say they're all bad. If I were making some kind of definitive list, it would include Cannibal Holocaust (which started the genre), The Blair Witch Project (which perfected and popularized it), and Cloverfield (which applied Big Hollywood formulas). I don't feel like watching any of those movies again anytime soon, but they feel like significant, artistic milestones.
2009's Yellowbrickroad is one of the lesser found footage movies. Let's put it this way: on a four-star scale it gets a two, which Roger Ebert would have placed squarely in "thumbs down" territory. You've probably got better things to do, but if you want to watch a shaky found footage horror film, you could do so much worse.
The film begins seventy years after the bright, fall morning in 1940 when the population of Friar, NH inexplicably dropped what they were doing and trudged en masse into the mountains without supplies. A military search party later found the remains of 300 people--about half the town--frozen to death and (in some cases) mutilated. No one has any idea what has happened or why, and the incident has passed into historical obscurity. The town has been repopulated in the intervening decades, but nobody talks about it. And nobody ever goes up into the mountains. The story was declassified by The Government in 2008.
The movie follows a team of documentarians in 2009 as they attempt to go up there and figure out what really happened, and they're prepared: they have a GPS, actual wilderness survival skills, and a psychologist whose job is to keep every brain on its toes. The townspeople aren't crazy about the project.
Needless to say, things do not go well. It's needless to say it because otherwise there's no movie. The military did an efficient job of cleaning up the mess up there, so if things went well, this would be the story of an uneventful camping trip. However, the party soon begins to hear a faint sonorous drone which resolves itself, as they climb further, into the syrupy big-band music of the 1940s. The GPS fails. All the equipment fails. Tensions flare, and as the psychologist administers something like the Voight-Kampff test from Blade Runner. Then somebody inexplicably murders somebody else for no reason, other than that he's a jerk. In the end it doesn't matter because eventually everybody goes crazy and they begin killing each other.
There's a lot of other stuff too, of course, including allusions to The Wizard of Oz and a metatextual ending that might be described as "mindbending" or "so, so stupid" depending on who you're talking to. Normally I'd say something along the lines of "but I'll let you learn those details for yourself", but I can see that I'm really not doing a good job of selling the movie. Its major sin, I guess, is that it's supposed to be slow, character driven horror, but there's nobody to identify with here and the plot is flat. You can get away with one of those things, but not both.
Yellowbrickroad was described to me as "Lovecraftian", and I can see why: people are driven insane by an inexplicable force. If your characters or events are interesting enough, you can get away with withholding all the secrets, but Yellowbrickroad is not worth the creative gymnastics required to make it work.
Here's the trailer.