You could certainly for example, film ‘once upon a time in the west’ in a green room and overlay the actors upon a western themed cgi environment, and have it look believably realistic.
But are the actors going to act as if they were under the burning sun as believably ? Will they avoid looking at the sun ? Will they tend to seek the shadows ? Will they sweat ? Probably not, and the feeling you’ll get from the film will be different, without you being able to know why
I do think CGI is often overutilized, much to the detriment of many shows and films, especially in genres where practical effects get the job done (i.e. - not sci-fi). However, these techniques are evolving, and the actors can at least start to see visual cues and interact with the same digital elements that the viewer will ultimately be shown.
Because the environment projects its own lights, reflections are automatically correct and don't need to be added in post. It also gives huge freedom to the DP for shots because they don't really have to light anything specifically.
And the best thing is that it's comparatively cheap so they can punch way over their budget effects-wise.
On the other hand you can do non-CGI effects in post as well. In fact its super common. Bluescreens, compositing, rotoscoping, etc were all common techniques well before computers had anything to do with film making and can all introduce the problems you describe. It was actually a common problem. People would spend a lot of time tryng to get lighting to match and to line up composited elements.
So its not a CGI problem at all. Its an in-camera versus post effects problem.
It is noticable that it’s not filmed in a hot place because the actors are never sweating, they move too fast, their skin doesn’t have the color and texture of a strong tan, they don’t seem affected by transitioning from hot to cold, they touch sand with naked hands, etc. Compare with western movies that are actually filmed on location, they somehow feel like they’re filmed on a hotter planet than arakis
EDIT: seems that most of the scenes in the desert filmed in situ were also in relatively cold deserts as the filming crew is wearing down jackets
And similarly, people don't bring up the vast amounts of bad or rushed practical effects being produced at the same time films like Star Wars and Lawrence of Arabia were produced.
I don't really think that bad CGI ruins films in most cases, but I think the author of this article does.
A timely example is Disney's Book of Boba Fett. The show is almost entirely CGI except for the actors. There have been some criticisms about particular assets like the biker gang's speeder bikes. But I've yet to hear anyone complain about the environments looking fake. Mos Espa is almost 100% CGI and it looks like a real set.
When it works your brain just accepts it. CGI is incredibly good at environments. I'd go as far to say that it has been indistinguishable from reality for the better part of a decade now. Where its gets noticed is in places where it doesn't do so well or when there were time or budget limitations. Fully CGI humans are still not believable and will probably be the last thing to get right. CGI non-human creatures have varying success. Compositing can still be difficult. Often its better to replace an actors entire body, save for the face, and create a CGI version in a fully CGI environment. Compositing a real person in a CGI scene is prone to floating body syndrome and lighting issues.
The real answer isn't necessarily that one is better than the other. But these are tools which should be used together to make a better product. And I think you'll find that modern films with the best overall effects do blend the two. Mad Max Fury Road is a good example, the vehicles are real with real stuntmen climbing on them but the environment is artificial. Shooting a film in the middle of a desert with nothing in sight is not practical. But shooting the scene on a sandy path and compositing in the CGI desert is.