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zeldaring said:

It's all about personal taste but for me the more realistic the better. Horror games would be way more scarier and open words would be more  engrossing.

Horror games is actually one genre I think benefit the least from more photorealism. Many of the aspects that made older horror games work had to do with the the limitations of the graphics. That uncanny unknown where it is not clear exactly what one is looking at can be created with better graphics but you will not get that "for free".

Fear more than pretty much any other feeling is created through your mind filling in the caps with what each individual find frightening. When the gaps are already realistically filled that individuality is lost. The unknow are frightening in a way the known never can be.