I'll be the first to admit that 360 and PS3 have better graphics and I won't even try to disprove that theory, their hardware can just do more. The thing is, you can still tell that the screenshots are games, this lady just came in my office and asked me "What games are those?" (she is 50 something and really has no interest in games but her grandson plays them). My point is that no matter how good the graphics they still look like games.
The last necessary imporvement to graphics occured last gen. After Nintendo's industry shake up, games will no longer be given extra points for graphics, gameplay and story will determine the quality not graphics.