I see a lot of replies which state that people would rather want innovative games and new experiences rather than beefier graphics.
I would love that too but from what I see, most game studios are obsessed with making cinematic and liner types of games where gameplay comes a distant second. There are exceptions obviously, but if a game is going to remove gameplay freedom and hold my hand to present a cinematic style approach, I want it to look great. And so do you...
Otherwise I am happy with playing XBL arcade titles as I am more likely to find gameplay innovations there than in the latest retail releases.