I think the main 'issue' comes from the fact things should be up to a certain standard. If others are doing it, why isn't X console. When youhave something to compare against, you DO notice how crap the graphics are.
This day and age, we shouldnt have to resort to 'paper' effects in games to cover up the fact there'es no graphical oomph.
And in the days before photo realism (not that we've reached it yet) the emphasis was on graphics because novelty comes from making zero's and ones into something lifelike, moving, and controllable.
It's quite hard to buy something 'cutting edge' that shows no improvement on the experience from a graphical point of view, you may aswell have a new controller for your old console right?
Until we have 3d holographic playstation 5's, we aint gonna drop the graphics bug.... until then, we continually struggle to make games look as lifelike as possible. In the future, graphics wont be as much of an 'obstacle', except if we buy a Wii3 and it has gameboy graphics, that would p*ss you all off i'm certain.
At the end of the day, its a power thing. Nintendo wouldnt have a graphics 'issue' if they had spent more on the insides of the console, EVERYONE would be buying a Wii - even Playstation fanboys. Remember, people will always ask the question "what's the best", and for that oyu need a tick in all boxes.
Until we hit that graphical development plateau, we have plenty of graphics considerations to make, and hell it could even help the retro games market, as they would have their own real category (not limited by hardware, but CHOSE to be low spec), opposed to being compared to the likes of new 3d games pushing the graphical boundaries of the hardware.
To me, before Wii arrived, games consoles had hit the gameplay plateau already, the market needed a kick up the arse and a different way of interacting, thats what commendable, even if it does kick off inspiration for other hardware manufacturers.
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