We here people like Kojima touting technical advances, and looking negatively on technological restrictions.

However some, especially gamers, are now criticizing technological advances in this gen, blaming it for the emphasis and focus on improving graphics, rather than gameplay.

However we can see games like MAG that's trying to use technology to improve the size of maps and the number of players allowed, and Bad Company 1 and 2, that are trying to get closer to reality, not by graphics alone, but by giving players more options with destructible environments.

People hail MIDI music as opposed to today's music. People criticize Holywood films as being too focused on celebrities and special effects.

What is your take?

Its all in the eyes of the beholder.

Graphics whether anyone wants to admit it play a huge role in a game, or in a case of a movie the special effects. But the same applies for game play. If you can not find a medium between the two then you are doomed from the start. I can see one of the two, graphics and game play, taking a back burner to the other in development but this of course does not mean they do not think about it. Advances in technology is a great thing. This allows us to bring dreams to fruition. And we have seen this in some games this gen. In games like Uncharted we can see a hollywood style story telling with great game play with beautiful graphics. Developers who take the time can incorporate everything needed to make a wonderful experience if they just take the time and seek advice if needed.

My take is that HD consoles haven't allowed for a lot of upgrades in gameplay. Yes, there are certainly some (MAG, Red Faction), but the upgraded power goes into immersion and atmosphere I think. Flower would not have been Flower if it had been on the Wii for example, nor would Heavy Rain be possible in its current form on the Wii.
Killzone 2 is also one of the most immersive and atmospheric games I have ever played, and Uncharted 2 sets a new standard in cinematic storytelling. Again something I don't think would have been doable to that degree on the Wii.