The problem is that, instead of the speed of modern computers translating to perceptible performance improvements for normal users, it translates to applications that use more resources.
Whether or not the new features make up for the general perceptual slowness of modern computers is a somewhat open question.
I would agree with you, but in terms of games it is simply not a great example. It may be questionable why would we want photorealistic games when 2D, visible pixels are good enough, but games are not known for being inefficient.
Whether or not the new features make up for the general perceptual slowness of modern computers is a somewhat open question.