Good graphics is a concept that I find is often misunderstood. There's a diffence between good graphics and high resolution. Sure, the PS3 (for example) has a huge capacity for detail, both in images and movement, but it's up to the artist to deliver good graphics.
A painter doesn't automatically get better just because she is given a finer brush. In fact, a lot of the time thumbnail sketches are much better and more lively than the finished design. Attempting high resolution, realistic graphics often results in stiff characters with severe lack of expression. A cartoonish approach is likely to be much more vivid.
A question I like to ask in connection to this is, if you carried a picture of your girlfriend (or boyfriend) in your wallet, would you rather it be a high resolution picture of her looking ugly or a low resolution picture of her lookig good?