Avatar has way more going for it than it's FX and you are frankly the first person in recent memory to suppose that is the reason why people went to go watch it let alone the sole reason.  Avatar was a great Christmas experience for the entire family and that is what lead so many people out to see it. Much like Toy Story 3 which more peole went out to see that year.  The graphics aren't even the draw in those cases. It's amazing experiences you can share with your whole family.  You have larger market potential when you do that instead of segregating the audience.   You are trying really hard to not see the forest for the trees.  

 Avatar's special effecgts were nice and they can afford to do what they please because they know Cameron returns on the investment he has a proven market history of doing so.  That is in no way a endorsement for any other compnay to spend that much on FX. That like Epic is a VERY special case.  That kind of approach for an industry at large is toxic.  It's why we see 3+ million in sales and the game isn't prifitable so studios get shut down in games. 

I have seen normal people with 20/20 eyesight to whom late PS2 madden games were were thought to be real life and they had to get pretty close to the already large screen to discern that it was a game.  They could not tell the difference almost a decade ago. Diminishing Returns.  In a theater my mother with good eyesight whom was 32 she kept asking me if I was sure they weren't real people when watching FF:TSW.  Diminishing returns. We hit good enough for the vast majority of the market a long time ago.  Nobody is going to even notice how real it is for all the money spent on in making it look more 'real' no matter the advancements it's just going to be a better simulated version of what you described above.  

http://scifi.about.com/od/scififantasymovieguide/a/KingAvatar.htm

Even a great film doesn't automatically do business, and the debates are not engaging mainstream America. What's really impressive about Avatar, ultimately, is the fact that it's drawing in scads of people around the world, without setting the world on fire. It's the ultimate eye candy, "a sumptuous feast for the eyes" in the words of Christopher Goodwin, a journey that wraps us up and takes us somewhere. It's the most profound of dreams. James Cameron has created a film in which moviegoers share the same desire as the characters: to live a different life. And through his craft, that dream is fulfilled.

Not the sole reason, but without the eye candy the other reasons wouldn't work. Many people went to see it multiple times for the experience indeed, graphics had everything to do with that.

I hear things like "a sumptuous feast for the eyes" being said of films that don't cost nearly so much to boot.  You can say the same with all of the other things Mr. Goodwin says as well. 

I think when people are discussing the film there are a few things that never really get called to attention because it's socially inappropriate to discuss. This is going to sound very racist but this is why I believe Avatar is "drawing in scads of people around the world, without setting the world on fire" I feel that Avatar has more appeal world wide than any other film because it appeals to non caucasion on a cultural level so well.  If you like I can go into more detail if you desire I just hesitate because as I said earlier it will sound REALLY Racist.  

Films can hit 3-500 million without that kind of graphics height.  I don't think graphics so much as subject matter of the film caused that extra appeal.  

But now we're over on your feelings, together with anecdotes about people with 20/20 vision who can't tell the difference between PS2 and broadcast TV.

(Based on my own anecdotal evidence) Even PS360 looks stiff and clumsy to casuals - and Avatar's hype was based entirely on how it looked, most people agreed that the writing was pretty horrible.

I think what he meant by not setting the world on fire has more to do with this:
Avatar, however, is hardly setting society on fire at Star Wars level, or even at Pirates of the Caribbean level. The dialog is not all that memorable ("There's no such thing as an ex-marine!"). Even the excellence of the soundtrack (with its score by James Horner) is praised as a repeat performance of Titanic's, but Leona Lewis's "I See You" isn't doing a Celine Dion in terms of being a constant companion (welcome or not) in everyday life.
It hasn't found it's way into pop culture like other high grossing classics.

And sure you can make a sumptuous feast for the eyes by pointing the camera at something beautiful, it's more the fantasy and new kind of spectacle made possible by the cgi that was the attraction.

Anyway Gravity just won 7 oscars, all for visuals and sound. No screenplay, or acting, or best picture. Why do you think so many people went to see it, for the experience made possible by the graphics and sound editting or to watch a grieving mother rediscover her will to live after facing certain death.

It still looks a lot better, but you're right. It's not like the leap from SNES to N64.

I went to see Gravity myself.  I went because the preview looked to be full of thrilling possible life threatening situatinos which it was so most certainly the latter. Women would have gone to see Sandra Bullock and George Clooney without the graphics.

The Oscar Committee and critics take pride in talkikng about things that aren't really a big draw to mainstream audiences all the time. This is why I stopped taking reviews seriously and just judging on the previews about a decade ago.  So you can stop using both to try to convince me as they haven't for some time.

Having your land stolen and way of life deprecated by white men(America, Corporations, Whatever metaphor for imperialism you'd like) is something that almost every culture the world over can understand and identify with strongly.  It's a nigh universal tale. Making them blue instead of any shade of red, yellow, brown or black or any human skin color and you have a way of depicting a situation that never ever get's talked about ever because it's socially inappropriate to speak about.  Even when talking about a movie that depicts it. The science fiction lense makes it almost cute and cuts through the drama that normally surrounds the issue.  Avatar's subject matter is profound and merits revisiting for many non caucasian people and thus it has a world wide appeal that few movies will be able to match. I think that focus on imperialism is what causes the appeal for world wide audiences.  

I don't expect a film critic or even most American audiences to get that.  The purposeful building of the Na'vi to resemble various indigenous people's by Cameron's experts.  Here is some great stuff from the wiki that might help others understand how this film appeals specifically to non US and caucasion audiences:

Cameron said "that maybe in the enjoying of it makes you think a little bit about the way you interact with nature and your fellow man". He goes on to say "that even though there are good humans within the film, the humans "represent what we know to be the parts of ourselves that are trashing our world and maybe condemning ourselves to a grim future".^[80]

Cameron acknowledges that Avatar implicitly criticizes the United States' role in the Iraq War and the impersonal nature of mechanized warfare in general. In reference to the use of the term shock and awe in the film, Cameron said, "We know what it feels like to launch the missiles. We don't know what it feels like for them to land on our home soil, not in America."^[81] He said in later interviews, "… I think it's very patriotic to question a system that needs to be corralled …"^[82] and, "The film is definitely not anti-American."^[83] A scene in the film portrays the violent destruction of the towering Na'vi Hometree, which collapses in flames after a missile attack, coating the landscape with ash and floating embers. Asked about the scene's resemblance to the September 11 attacks on the World Trade Center, Cameron said he had been "surprised at how much it did look likeSeptember 11".^[81]

Tons of reasons for international audiences to love the film that most mainstream films don't touch. Cameron managed to do it with most people having seen it and still being none the wiser. If you want to simply say Avatar is just a pretty film and that is even the largest part of it's appeal fine you are free to think so.  I think that questioning imperialism in today's society is something the world over is concerned and cares about because it is where most of our defined cultures come from. That in that way Avatar can be seen as something touching on the zeitgeist and resonating well with international audiences making it more appealing than mainstream films before it.  

The writing of any blockbuster film is often horrible.  Luckily with movies in particular there are far more and better ways of expressing your intent. As you'll see in my above post there are reasons for the film to resonate with international audiences outside of how it looked. 

If you can show me some data showing the number of households whom even have a 1080 p television of the right size(I believe 42'' or larger) to percieve the difference between 720 and 1080 and I will stop hollering diminishing returns.  You just can't. HD TV penetration is supposed to be 50% by 2016 last I heard. Though those do not make a distinction in HD level.  

Generally speaking, if you sit more than 10 feet away from your TV, and your display isn’t bigger than 50 inches diagonally, you won’t be able to tell the difference between 720 and 1080. 

Most customers don't have the equipment needed so they can even notice the difference. It's where technology is in consumer homes that clearly state most people can't precieve the difference. Irrespective of my or your own anecdotal evidence. 

Most consumers actually do have the equipment, as I've shown above.

However, when was this resolution thing even part of what we were talking about?

I have already said that diminishing returns are real enough, but that you can't point to them in one field, such as polygon count or resolution, and conclude that we've reached that point in all fields.

My wife doesn't want to see gravity, she thinks it's dumb. I bought the blu-ray, the 2 hour technical behind the scenes footage is definitely worth watching, and it looks great. Although it pains me that all this tech and budget gets wasted on something so simple, Alfonso Cuoron could have taken on the humanities first interstellar space flight in Stephen Baxter's Ark. Very interesting and pretty realistic plot. Anyway I'm glad he got the oscars, he was owed due for Children of men.

And yes I got all that from Avatar but found it very simplistic and heavy handed. There are much better movies and documentaries dealing with the subject matter. But maybe I'm overestimating the intelligence of the general audience, it was a weird realization too when I found out that most people (still) don't see the satire in Starship troopers. So maybe the straight forward approach of Avatar better fits the mainstream. I found Starship troopers much better though.
Avatar is just Dances with wolves with colorful explosions and a happy ending, with stuff from Lawrence of Arabia as well. (Now that's a visual feast, looks amazing on blu-ray mastered in 4K restored from 70mm) Avatar doesn't come anywhere near those 2.

I stand by my reason that most people went to see it for escapism, not to get riled up over current affairs.