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DonWii said:
Simple: People expected more.

Personally, I think Halo 3 looks better than Gears of War, but that could just be because I prefer games with colors other than gray.

Exactly, the point is that Halo is the flagship franchise for the Xbox 360, a console with a strong focus on graphics and HD graphics. Halo 3 doesn't look better than or even as good as some of the other titles on the 360 (Gears, for example) and it isn't running in an HD resolution natively. Halo 3 looks good, and there's nothing wrong with it graphically.  It just doesn't reset the bar to a higher place like Gears did or like people expected.