Nowhere to go with graphics any more? We've barely scratched the surface on graphics and rendering and I don't think the entire world will stop/have stopped caring about technological advances in visuals and audio simply because the weakest performing console won this gen.
I can see it now, developers like Blizzard, Valve and Bioware starting to make games with nifty controls and sub-par visuals just because its cool.
You know, they said the same thing back when the first 3-D games came out and when the first Final Fantasy movie came out; there's nowhere to go from here, we've reached the summit.
I'm fairly certain that someone, somewhere, said the same thing about wheelbarrows, early boats, clothing and all manner of things.
Just because something is perceived as good or good enough, even if it were by a majority (it ain't, most gamers would want advances on all levels I believe) doesn't mean it can't (and won't) be improved upon.
And thank god for that, where would we be today?
PS: Remember "Virtual Reality"? It was all the blaze and was supposed to feel real and be "the shit" for the future. Well, it wasn't, turns out it had very few applications (at least back then) and the immensely drab visual and audiovisual output of the devices made the whole thing seem as real as... well, as real as pushing buttons on a gamepad and watching games on a TV.