Example. Mass Effect 1 on the 360 had great technical graphics, but terrible performance. As a result, I, along with many others, would give the game a mediocre graphical score.
You can take a fucking still frame photo and call it a game, and say "that game has great graphics" but it really doesn't.
Graphics are determined by 3 subcategories. For "graphics" to be good, they must perform well, look great technically at the time of their release, and have a good art direction or art style. If a game trying to emulate real life comes off looking like the Smurfs, then you have a bad(or great) art style depening on your point of view. Games that focus on real life, have a real life focused artstyle. Gears of War doesn't. Have you seen the characters and humans in that game? It has an artstyle that emulates real life, but doesn't copy it. Thus, it has an interesting artstyle if nothing else.
Every game has an art style though. As long as games are still representations of actions, instead of the actions themselves, then art style will take that role, and artstyle will win out over already obsolete technical graphics every time. If the only use we had for technical graphics was to make things look closer to Real Life, then we would have a pretty boring and redundant industry. RL is just a benchmark that we are reaching for,it's certainly not the goal.