Not a gamer of this generation (currently playing Tetris on my Game Boy Pocket) and I really haven't played many games that would fall under the realism category but I'll offer my views since the same ideas can be equated to comics.
Firstly I'd suggest you folks watch the 10 min documentary I posted in Happy Hour about Pixel art and the appeal to style and simplification.
I think manasecret has got it backwards. Games with simpler more abstracted graphics are usually much clearer when it comes to what you can interact with. Whereas in a more realistic game who knows what items you character can pick up or alter rather than just being part of the scenery.
The graphics of a game or comic influence the mood and what can be done in that visual form. I think horror is a genre where for it to be truly scary you need as much realism as possible. Everything else...well...
Take Everquest 2 with it's superior graphics and realism
and compare it the blockier and more stylized WoW
Which is more appealing?
Stylized games age much better than realistic games.
Medal of Honor on PSX:
Crash Bandicoot on PSX:
Next generation this is going to look outdated (that shrubbery is going to be laughable):
while a game like Super Mario Galaxy (not shilling for the Wii, just don't know many current other games) or Banjo Kazooie Nuts and Bolts will still look fresh.
Flash (and most superheroes) look utterly ridiculous when fully realistic.
Being able to exaggerate is key to making things interesting
And then there's the whole issue of the uncanny valley.
So is realistic really always better?