Horror games is actually one genre I think benefit the least from more photorealism. Many of the aspects that made older horror games work had to do with the the limitations of the graphics. That uncanny unknown where it is not clear exactly what one is looking at can be created with better graphics but you will not get that "for free".

Fear more than pretty much any other feeling is created through your mind filling in the caps with what each individual find frightening. When the gaps are already realistically filled that individuality is lost. The unknow are frightening in a way the known never can be. 

For games with a focus on realism the more realistic the better. I'm more interested in the graphics push for other types of games though since a cartoony game with visuals as good as a Pixar film would be amazing. Lighting and visuals in general of that quality would do much for so many games.

***Spoilers***

Get a slight look at the English VA and then some gameplay. 

Real life can look like a painting and thats what RDR 2 goes for. if you ever watch nat geo with use of their  100,000 cameras that's what realstic games should be going for. Just watch 5 minutes of this and tell me you would not wanna game that looked like that lol.

Also the last of us 2 character models look far more real then those in cyberpunk and its not even close.

Personally, I like all the tech. On the other hand, I find chasing photorealism to be utterly boring (unless it's a sim), and always prefer stylized realism, which uses all the tech, but has distinct art style which no one would confuse with being real life.

I personally don't feel that photorealism is inherently boring.

Reality is photorealistic, yet there are many places in the world that look stunningly beautiful.

Live action films looks photorealistic, yet they still give awards for best art direction. 

Photorealism can be gorgeous; it's all about how you implement it.

I don't find photorealism to be inherently boring in games, I just personally tend to find it boring, especially if it's just photorealism that is without any artistic augmentation. Tree with photogrammetry 8K texture does nothing for me, but there are people impressed with such things, and that's ok.

Yes, there are probably infinite amount of places in the world that look stunningly beautiful - yet I personally find best cinematography is usually one that is made in a way that clearly stands beyond that reality.

I don't mind photo-realism, I actually look forward to it to see how far things have been pushed... And in the hand of a competent developer it can augment gameplay. (I.E. Realistic lighting/shadows for stealth or realistic foliage in a jungle that obscures the enemy.)

We are still far removed from photo-realism though.
And lighting is still a generation or two or three behind.

We have gotten good at texturing and making models though... Mostly thanks to photogrammetry.

At the moment Alan Wake II, Cyberpunk 2077, Horizon: Forbidden West, Avatar: Frontiers of Pandora, Dead Space are showing the most impressive visuals so far this generation... And they all have one thing in common, they use custom engines with their own strengths, weaknesses and priorities for the current hardware platforms.
Northlight Engine, Red Engine, Decima Engine, Snowdrop Engine, Frostbite...

We have gotten to the point in gaming where we can make things look really really really really really freaking awesome.
But the level of interactivity/simulation is still stuck in the 7th gen... And that needs to change.

I understand now, it's the tech demo that's the issue. They washed out the city and made everything to clean to achieve the realism look. As long as games retain that fresco sheen on top of the realism I'm all good with it. The RDR2 video you posted is perfect and if games went in that direction with realism as a secondary pursuit over the atmospheric effects and painterly like quality of course I'd love to play something that looks like a Our Planet in HDR or whatever HDR evolves into with Naughty Dog character models.

That's fair. Personally I am often struck by the beauty of nature, or even how good live action film can look with the light composition, colours, lighting, etc.

The world we live in can be a magical place, and photorealism can capture that magic and use it to bring fictional scenarios to life in a believable way.

Yeah, while graphics have come a long way since the days of the PS3 and Xbox 360, I feel like interactivity has not kept pace.

Games like Crysis and Far Cry 2 are more dynamic than the vast majority of modern games even 16-17 years after their release. One of the most impressive games in the last decade for me is BOTW, simply because of how many interactive systems it manages to weave together into an organic whole.

Modern games look beautiful, but the beauty is often only skin deep, as they remain for the most part static sets made for looking rather than touching.