Even the inventors of the GDP metric never claimed it was a truly accurate indicator of human well-being. It is just a convenient and easy metric of social productivity (particularly useful in war-time).
Unlike the GDP, the GPI does not consider things such as environmental disasters and pollution as beneficial. For example, the Exxon Valdez disaster and Katrina both caused a marked *increase* in GDP. GDP also ignores such factors as skewed income distribution, national debt and non-market activities (such as stay-at-home parents). Crucially, any non-market work (charity,community,childcare) is considered literally valueless.
All these factors are why there is (in my opinion) such a stark contrast between the supposed macro-level economic recovery of the 2002-2006 time-frame, and what we as citizens are actually seeing in the trenches.
While the GPI is a more complex and less clearly defined metric than GDP, it is useful to look at some basic attempts at defining it - keeping in mind that certain aspects of the metric are obviously still subject to personal views.
This site has a basic graph of GDP to GPI that demonstrates the gist of the assertion. Essentially, there can be (and possibly has been) a simultaneous rise in GDP and a decrease in GPI. I personally think the GPI index more accurately represents the world-view of the average citizen.
In a nutshell, we as scientists may be to blame for putting too much emphasis on an incomplete metric!