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First, I doubt every game needs to be photorealistic, it's a matter of style... for example, Eternal Sonata.

Second, Photorealistic doesn't means violence or gore etc. by default. Look at racing games, they are near photorealism.

Third, if anything, ESRB will need to adapt themselves. Nobody would pay or make it important if they get too harsh on ratings. Just think that if Final Fantasy, Halo, Grand Theft Auto, Madden, Smash Bros. and Pokemon get A.O.... you think retailer will not carry them because of the rating? My guess is that they will ignore the taboo on the rating just to get the sales.