Remember how easily games were able to surpass really polished games that had a lot of work done for their graphics in the end of the last gen (BLACK, GOWII) but how early games of the next gen were able to surpass them? So imagine games having even better graphics than Killzone 2, GoW III, or Heavy Rain, all without as much effort. What's more scary is that this generation isn't even over yet. Perhaps we truly will enter the Uncanny Valley in the next gen (if Heavy Rain doesn't get there, which I don't think it would).
The only negative I think is how realistic do you want games to be? Do you want to literally have a murder simulator?
I think that if there's any game that should explore this theme is Hitman. Imagine if you were about to execute a defenseless person and you can see the tears beginning to form in their eyes, and their facial animation is realistic to the point of creepy realism. If anyone played Hitman: Blood Money (couldn't get into SA >.<. Haven't found or played Convictions) the best mission is the demo mission: The Death of a Showman.
In all the other missions you don't know about nor really care about the targets. It's all just accessories for the core gameplay. However in the demo mission, instead of the core gameplay, the story is what drives the entire mission. As your progress through the level, you learn more about the target, what he's done to warrant a hit, his personality, his flaws, what's going on his life right now, and his humanity. And robbing him of his humanity in the end truly does justice to the title: Hitman.
==========================
My point is that when graphics, animation, and AI become so good, it becomes a bit creapy. It doesn't feel like we're shooting a laughably stupid AI. If we have things like we saw in Saving Private Ryan, in a serious setting/manner, it becomes a bit creepy.
God of War is over the top and unbelievable, just like it's supposed to be (Greek myth+Holy wood thriller/action/epic).
If there was a serious game though, that depicted murder in a realistic manner, and the characters didn't seem like 2D AI (like in Hitman, or at least it's demo mission) then it becomes a bit weird.
Point: Graphics alone doesn't really make realistic violence disgusting/creepy. However if a game doesn't depict the characters you're about to kill as dumb AI, then with the realistic graphics, it becomes a bit too real and creepy.
