Using the same modeling and texturing techniques and increasing the detail of the in game assets to a level where they wouldn't have graphical-artifacts at 1080p shouldn't increase development costs by (too) much; and most games would see some benefit from this if they were displayed on a HDTV. The over-all result of this would be games that looked crisper and cleaner, but it would still look more like a Wii game than what people associate with a HD console game.
In contrast, the advanced shader effects that add graphical richness and make games look more "Realistic" offer a lot of value and the main problem with them is they push development costs to a level that few small or mid-sized franchises can survive. The only games that would benefit from this are probable games where sales can be expected to be above 2 Million units; and if the game sells less than this the lower profitability (and potential loss) pushes the game to a level where it is far less viable.
