Bad writing and bad mechanics can absolutely ruin a game far beyond the ability of art to compensate -- but it's both absurd and cruel to blame this on art.
"often ... because they're at the expense of everything else,"
Which seems plausible although "often" may be harsh. Too high a proportion of your budget on art is rarely going to end up somewhere good, unless the art is the main point. There does seem to be a bit of a AAA arms race here, which isn't necessarily a net gain.
The art department can make the feedback better, the objectives clearer, the interaction easier, but fundamentally you can have a game without any art at all (see dwarf fortress, zork, etc.) and have it be a game, whereas a bunch of art assets by themselves don't a game make.
Nowadays it's all about marketing material and lying to people, so having good game art is prerequisite for great prerendered trailers that will drive preorders. But when you allocate all your budget to art, you don't end up with a game, you end up with false promises.
These artists/engineers have accomplished absolutely amazing things and really pushed the limits. But somewhat ironically... gameplay/story is still king when it comes to 'games.
I will say, when a game does blend the two, they are usually highly applauded, it just rarely happens nowadays that a game has both very good graphics, and very good gameplay.