To be honest, in terms of hardware power, I think we're almost their. PC hardware if utilised properly could generate some incredibly realistic looking models and textures (hair and the associated physics might be a bit longer mind). The problem is now more to do with how well the animators can get it right.
Without extensive and detailed use of motion capture, animations can just look wrong. Even then, artifacts still creep in and give you those "Urrggh" moments.








