100 times this. If you want to know how important photorealism is to getting your subject involved with the medium, go read a paperback copy of Lord of The Rings. It's pretty lo-fi.
There's tilesets, but honestly I think they detract. My extended ASCII are like 8x12 pixels and scan really easily. Even at 32x32 I can't reliably tell the difference between a dog a cat or a rat in most tilesets, especially on first glance, so a lot of memorization is still required with tiles, they allow for less information to be displayed at once, and they are more complicated to recognize.
I agree, it is a proof that content >> presentation, but there's no doubt a better interface and graphics wouldn't benefit DF greatly -- it currently has a huge cost barrier before the fun part, which most people just aren't willing to try and break.
I think there is a connection; "AAA" games suck for a lot of the same reasons that Hollywood films suck:
* The "average joe" gamer/moviegoer expects incredibly lavish productions with photorealism, explosions, over-the-top action, etc. Making a game/movie for this audience is very expensive and very risky: They need to spend a lot, and charge a lot to a huge audience to make up the difference.
* So that developer/studio tries to minimize their risk and sticks to what they know how to make and what they know people will buy: the same two genres over and over and over again (FPS and third person action, or over-the-top action and screwball comedy), lavish "set pieces" and gimmicks that look cool in advertising but don't contribute anything at all to the gameplay/story (like "the one building you can destroy" or the "quick-time event": "press X to watch the main character do something really cool instead of just doing something cool yourself"), big-name actors for promotional value, etc etc. Some aspects like writing quality aren't considered as important and aren't given as much attention. Some things that make a better game/movie would be actively harmful to its commercial success (true novelty, gameplay/plot that takes effort from the audience to understand/appreciate), and so these qualities are avoided.
* Despite being incredibly formulaic and so on, these games/movies are very successful with their target audiences. To add another layer of metaphor, they're the fast food of their mediums: unremarkable and probably bad for you, but highly available and consistent in their quality. You might wish it were better, but you'll probably enjoy yourself on some level regardless. Critics and more sophisticated gamers/moviegoers decry the state of their respective industries at large while temporarily ignoring all of the cool stuff put out by smaller studios and passionate hobbyists.
In the decades before expensive CG raised the expectations of gamers and moviegoers alike, there was always the equivalent of these successful but substanceless creations, but you saw a lot more experimentation coming out of the big studios. The same company could put out a generic space shooter (sorry, shmup fans) today and a unique exploration game tomorrow. It's simply not feasible for those same companies today to dedicate as many resources on niche titles as they do for their blockbusters, and at the same time they've forgotten how to do small productions. It's not the end of the world, because digital distribution and crowdfunding gives the little guys the power to strike out on their own, create niche, experimental productions, and survive, but it is sad to me that these media juggernauts do more to advance the state of the art in computer graphics than they do in gameplay or storytelling. (No offense, computer graphics programmers, I'm fascinated by the field)
Well, that's part of the reason. Another part is that since the debut of the PlayStation, possibly a bit earlier, video games are marketed to a wider audience, and the emphasis has been shifted away from challenge and fun towards audiovisual razzle-dazzle. In order to sell to this new audience, the games had to be easy so that the average new player had a chance of beating them; and they had to make a visual impact. Sony set developer guidelines to make the graphical capabilities of the PlayStation a selling point and enforced them on third parties; in North America, for instance, sprite-based games were highly discouraged in favor of polygon games and also severely restricted. This restriction did not hold in Japan due to peculiarities of the Japanese market in which certain genres with recognizable tropes (shooters, 2D fighters, JRPGs, "visual novels") predominate.
I used to joke that the camera spin effect prominent in early PlayStation titles like Final Fantasy VII was mandated by Sony's PlayStation developer license. I still have my doubts as to whether that was entirely a joke.
Anyway, combine this massive shift in marketing emphasis with typical 90s xtr33m to the max attitude and the passel of limitations imposed by an asset pipeline that overwhelms the developers' technical capability to keep up, and you have a recipe for trivializing the medium to the point where the damage is still strongly felt today.