I agree somewhat. On Wii style means more than realism. I think HD consoles actually suffer a bit because a lot of developers just go for realism and many games lack a style of their own. Nor is one appreciated often. A lot of people didn't care for the look of PoP but I thought it was great.
We have seen style trump realism already on Wii. Shaun White crushed Shake It on Wii despite they came out about the same time and offer similar experiences. Shaun White used style, Shake It tried to be realistic and looked worse for it. Stylish Grand Slam outsold realistic Virtua Tennis. On the flipside, going with a more cartoony look seemed to hurt Madden sales.
Besides, Nintendo doesn't even go for realism very often and it's their system so why should anyone else? Don't get me wrong, I love the graphics in Silent Hill:SM, quite impressive (for Wii) but that didn't sell either and developers have to sell so they should do with what sells.