Ray tracing is the obvious path towards perfect photorealistic graphics. The problem is that ray tracing is really expensive, and you can't stuff enough ray tracing hardware into a GPU which can also run traditional graphics for older games. This means games are forced to take a hybrid approach, with ray tracing used to augment traditional graphics.

However, full-scene ray tracing has essentially a fixed cost: the hardware needed depends primarily on the resolution and framerate, not the complexity of the scene. Rendering a million photorealistic objects is not much more compute-intensive than rendering a hundred cartoon objects, and without all the complicated tricks needed to fake things in a traditional pipeline any indie dev could make games with AAA graphics. And if you have the hardware for proper full-scene raytracing, you no longer need the whole AI upscaling and framegen to fake it...

Ideally you'd want a GPU which is 100% focused on ray tracing and ditches the entire legacy triangle pipeline - but that's a very hard sell in the PC market. Consoles don't have that problem, because not providing perfect backwards compatibility for 20+ years of games isn't a dealbreaker there.