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dtewi said:
Because sometimes they add to the atmosphere of the game, making it more enjoyable overall.

Here is an example where you are wrong. It's art direction that affects the atmosphere rather than the technical aspects. While having a more powerful console allows for more freedom in this art design, it doesn't mean a game will be more immersive because of it unless it's used. Even so I already responded to this earlier with how I said the effect wares of after a while.

See More Metroid Prime Various at IGN.com

This is a picture from the game metroid prime. It wasn't only well known for it's gameplay, but for being more immersive. When you would walk by a vent of steam your visor would fog, when you moved under a water fall your visor would appear to be wet. If something caused electrical shock your visor would go in to a static mode. Now this game by no means was the best technically of the last gen games, but it hit it's target of you being on an alien world that while different is also similar. Look at the picture, don't heed the low quality of the shot due to old equipement, but do you see how the idea of you being in an area full of snow allows you to be immersed? Of course I do. So no it's not the graphics that allow you to be more immersed, but rather how the art designer goes upon using these graphics. After a while the effect wares of anyway when you think of more important things like staying alive, or concentrating on the gameplay.