I'd have to agree with the assessment that much of the increase in processing power in the latest consoles seems to be going toward making prettier graphics, but I'm not so convinced that makes it a total wash. Look at games like Ninety-Nine Nights; Gameplay wise, it's pretty much Dynasty Warriors with a different skin. That skin, however, makes a huge impact in the feel of the game. The primary mechanic of Dynasty Warriors (and, by extension N3) is cutting a swath through a large number of foes, and that mechanic is very well served by the newer hardware's capability of rendering 2x or 3x the number of foes on the screen.

I'm usually fine with the graphics of my Wii games, and find myself resenting them only when the developers think "Oh, it's just the Wii, we'll phone the graphic design in on this one." On the other hand, I'm not going to slight the visual advances the powerhouse consoles have brought to the table, either. Used properly, pretty graphics won't make a bad game good, but they can make a good game great.