I don't think "we don't need them yet" Whenever we develop the technolagy we develop it. That is just the time we are in. But I personally don't need the photo-realistic graphics yet. I am perfectly find with 2d games, I actually prefer them. I only just got my ps2 lol, and the graphics look outstanding in my opinion.
Final fantasy 12 is nearly orgasmic! The in game graphics are so insane, the little tiny details like necklaces and stuff move when you walk, its so great.
But personally my favorite part about the graphics in that game are the little 2d ones in the sky pirates den. That was a real treat for me. I wish they still made big epic rpg's with those classic style sprites.
The graphics we currently have are far beyond anything I would ever need, but never the less, I don't mind them upgrading even more, it just gets nicer and nicer.
I say I prefer 2d graphics, I do. But when I think about it. If FF12 was 2d, it would be totally different... The 3d world i provides totally immerses you in the experience. It's like you are truly in Ivalice.