i want realistic physics, high definition textures.
But non necessary to be photorealistic. Look at sunset overdrive, zelda SS(if it had been done for next gen)...
A good art-style is more apealing for me than the reality.

Hm always depending on the Genre
A Racing Game with Photorealistic graphics is far more profiting from it than some others may be.

Photorealism for more Genres could be interesting in the combination with something like the Oculus Rift where you really feel like you are inside the game.
Right now i don't really see a reason to copy+paste Real Life.The standard we got introduced from Naughty Dog and some others is far enough.

http://www.themogblog.com/wp/wp-content/uploads/2011/07/street_fighter_the_movie.jpg" border="0">

And you can even play as Van Damme as Colonel Guile!

The power of photorealism!

(Your img is broken btw)

Street Fighter: The Movie

So you have Street Fighter, Van Damme and photorealism in one game.
What else can you want?

I do not agree with Killzone being trying to be photorealistic. They went with their own look but wanted it to look as good as possible.

Beside that, photorealistic game could be weird now that I think about it, shooter could become even more controversial if what you shoot ingame look 100% real, I do not think we will see this ever anyway.

I don't like photo realism. I deal with it every day. When I play games, I want it to be an escape. Give me vibrant worlds.

Imagine this... In a few years, fanboys all over the net will be saying photo-realism is a bad thing and use it to downplay other games...

Well, it's like why do we watch a movie instead of just reading a story? It's all the same right - one is words - which could give us all the same information, and the other we know that Christian Bale really isn't flying through the air in a bullet proof bat suit, but it's fun to believe that he is. And the more it appears that he is, the more we can emmerce ourself in it, and feel like we have lived an extra life beyond are own meek existence.

Anything thing that pulls us out of the fantasy tends to cheapen it - like when we see a string holding up a model space ship. Now, there are many mediums like graphic novels, cartoons, anime and stylized games that aren't meant to be photo realistic - but they usually have a more limited appeal that a more realistic game.

It's easier to get lost - and fun - much like the 'safe scare' of going on a roller coaster. We get to pretend to be something we are not, do things we can't, and re-spawn if we die. Photo realism is a stylized choice to help use 'believe' in the game more.

TL/DR: More people will connect better with a more realistic game.