We're not at the point of diminishing returns yet, and I'm not sure we're at the point where I'm fully satisifed yet either. I'd say when the environments look rich and manage to look good even at a higher resolution is when the graphics are 'good enough' for me. Regarding realistic-looking games, some were probably there at the end of the 7th gen, and a lot are starting to be there now (or this gen in general). But some games still aren't even nearly there. As for artistic games, stylistically they're already there. It's about how well they cope with increasing the resolution. 7th gen games generally hold up pretty well because they were already designed for a high resolution, but games older than that have a harder time. In general, I'd say that anything before the 7th gen is unsatisfactory, and even the majority of the 7th gen is.
That's not to say I don't like the graphics before the 7th gen though. There's a lot that could be done to make them better, but they're fine as they are. It's mostly that when you increase the resolution, everything starts to look so empty. That's why I don't always like increasing the resolution too much. That's also why I'm talking so much about resolution. When you increase the resolution, it reveals the lack of details a lot of older games have. And by details, I mostly mean objects etc. in levels. For some reason, the emptiness is much harder to notice with a lower resolution.
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