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There is another way to look at it.

Why make the graphics better if the average customer doesnt care about the graphics beyond a certain point?

The best games historically always had superior gameplay rather than revolutionary graphics so it would make sense that instead of worrying about something most people dont care for, spend that time and money on gameplay instead. I do believe that this is the lesson that should be learned from the Wii unfortunately some devs are just there to milk the Wii and dont bother spending more on gameplay at all. To me, spending most of your time on graphics is just a tactic to hide how bad a game really is underneath. Its like a Jaguar with a Pinto engine. Id rather have a Jaguar engine in a Pinto body.