There is this uncanny valley thing where the scenery becomes so realistic that the very small incorrect details really start to jump out and become distracting. Sometimes even annoying to a point where I can't stand playing a game any longer.
It's strange really, but when a game goes for extreme realism, it feels as if my brain is expecting the game world to be a carbon copy of 'the great outside'. It's only in these situations that any tiny discrepancy really jumps out at you. This is not the case with art which is obviously stylized.
edit: What makes this even stranger is that I have very poor eyesight (congenital Glaucoma). I can't see the difference between DVD's of olden days and stuff made and displayed in 1020p HD. While this saves me from having to invest in preposterously expense TV's, it does give me a very skewed view of what 'realism' means.
I guess it's similar to how the vision interpolates in the blind spot -- the brain is really good at making this information up if it's convinced it's being served low-resolution material. The ghosts in Pacman seem convincing because they move around more or less like you do.
Example: http://i.imgur.com/shM90.jpg vs stock Minecraft, most people much prefer the linked image and find it more immersive.
Also, I would argue that most really successful games outside sports and racing games have unrealistic graphics. I think its actually stupidly limiting to try to use true to life models in your games.
.... I had a huge list here of games that I felt were beautiful that matched up with this aesthetic but really I just need to link one game. Limbo
You can trim a lot of the URL generated by Goggle. Just remember to look for the "tbm=isch" and "q=" parts.
Minecraft, DwarfFortress, any of the Roguelikes are counter examples.
Graphics are important. Really awful graphics could kill a game. But amazing graphics on a rubbish game ("Rise of the Robots") don't help.