Ya. A universal truth with new perceptually compressed formats seems to be that the more quality you want in a given size, the most you pay for it in terms of power needed to compress and decompress the data. You get trickier with the math and it gets you more for less, but at the cost of calculations.
In fact, you find that some seemingly "inferior" compressions were invented for just that reason. DV is a good example. It came around in 1995 for use in digital video cameras. However, when you look at it by the numbers, it is inferior to MPEG-1, which was already out (came out in 1992) and to MPEG-2 which was nearly finalized. Why then would you want a new standard if it was worse? Well because while it may have offered lower compression, it offered two very important advantages:
1) Better recompressing. DV handles multiple uncompress recompress cycles much better than MPEG in terms of degradation.
2) Simpler hardware implementation. DV is extremely simple to encode and decode, and as such requires little in the way of processing electronics to make it happen.
The second one was really important. Back in the 90s, a hardware MPEG encoder was a rather pricey unit, the kind of thing that you wouldn't be able to put in a low priced camera. So instead a format was invented that used more bandwidth for a given picture, but didn't take as much processing power.
So I know full well you can do HD video in less bandwidth than DVD. I've done it myself. I also know you pay the price in terms of computation time. Takes an amazing amount of power to encode, and not a trivial amount to decode.
Also the whole "only looks good in motion" thing? Ya that would be a recipe for disaster. Games spend plenty of time in low motion. In addition to areas to the screen that have less motion (like status displays) there are plenty of times where a player looks at one thing. In terms of strategy games this happens all the time, but even in FPSes. You are guarding something so you look at one place, etc. If the image goes to shit when that happens, well people are not going to be happy.
I'm afraid games are just brutally difficult when it comes to compression.