For me it was the PS3/360 generation, although it was slight and only just beginning. To be clear, I think those consoles had better graphics than the previous ones and games have continued to look better and better, but that was the generation where I no longer thought it was as much of a huge leap forwards and could still play games from the previous generation and still think they held up graphically.
In fact I still think the 6th gen just about passes, graphically speaking. Not every game, but I can easily play Metroid Prime, Conker Live and Reloaded, Jak 3, MGS 2, FFX, FFXII, GT4, DOA2 Ultimate, Soul Calibur 3, Panzer Dragoon Orta, Baldur's Gate Dark Alliance, Ninja Gaiden Black, Devil May Cry, Resident Evil 4, Twilight Princess, Kingdom Hearts II, Okami, Wind Waker, Shadow of the Colossus, Rogue Leader and many more, without thinking they suffer graphically, yet these are almost prehistoric compared to modern systems.
This isn't to say that 7th & 8th gen games don't impress me, they do, and I know they'll continue to get better. I'm currently playing God of War on a 4K screen with HDR and I think it's gorgeous but this is about my perception of diminishing returns. The fact that a game from 2018 blows away a game from 2005 is no surprise, but it just doesn't feel like enough of a jump to me. To put it another way, if I look at The Last of US on PS3 and compare it to GoW 2018 on PS4 Pro, obviously GoW looks much better, but I would say they look comparable and roughly of the same generation. I don't think I could say that quite as easily with gen 6 and gen 7, but I definitely wouldn't say it with gen 5 and gen 6.
So, to me, the returns are diminishing, but I'm not disappointed by it, I know that graphics are getting much better and stuff we had to fake before can be pulled off in better ways (e.g. lighting), I know that resolutions have kept increasing and so much more is going on in a game today. So I'm still excited for how games will get better and better looking.