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Over a certain level, graphics just don't need to improve anymore.
It's not very useful to put more detail into an arcade 2D Mario, the point of the game is not about immersion. Also too much detail can make the visual confusing, expecially if you're playing a fast-paced game on a low-res screen.
The 3DS iteration will look better anyway, thanks to higher resolution (compared to DS), better shaped 3D models, 16:9 ratio and streroscopic 3D.