I think part of what you are seeing is a changing of the PC market. The games that have generally pushed the graphical envelope are first person shooters. From Doom to Crysis, those were the cutting edge games, demanding the highest hardware. But really, this market has mostly moved to consoles, probably in part to Halo, but possibly equally due to the ease of playing online now. Even though Sony gets crap for their system not being as good as Xbox Live, it is still a good system for playing games online. You can easily jump online and find lots of people to play with, and everyone's systems run more or less the exact same, keeping everything fair.
So without those hardcore FPS graphic fiends, the PC market is adjusting. A company can no longer assume tha players will upgrade hardware for their games. That is why companies are focusing more on making stable, functional games that play on an everyday computer. The two premier game companies Valve and Blizzard are prime examples of this. Now that is not to say you can't make games that scale well. Left 4 Dead, with its graphics on full, is far prettier than the same game on the Xbox 360. But most people will play it on a modest system, and games need to be designed with that in mind.
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