My point of all of this is, if graphics really are that important, then why isn't every single developer trying to push for the latest and greatest graphics?
You have some developers who stick to the PC, while other developers are fine making smartphone games. Clearly, graphics are not a defining point for some developers.
It depends on the developer and how they want to express themselves, not to mention it is linked a lot to the fact many don't have access to the large teams and huge budgets to make graphically impressive games. I would bet that if you were to give many of these developers access to the right amount of resources for visually stunning games, so they can fully express what they imagine a game looking like (or changing course on a game), most would take advantage of it in a heartbeat
So yeah, you are right in a way, graphics is not the defining point because many can't afford to take that risk, especially small teams.
But then you have people complaining that games are becoming more expensive to make with each new generation. Maybe the problem is that developers are setting their standards too high. Maybe these problems would be solved if everyone just dialed back from making games more like movies. You don't need voice actors, motion capture tech, Hollywood-style budgets to make a good game. None of that stuff is necessary.
Graphics may not be necessary, but they don't hurt a game most of the time either. Do you really think COW games would be as popular as they are with cel shaded graphics? Certain games, due to how they are presented and envisioned by the developers, will require a certain amount of realism. That means voice acting and Hollywood movie budgets and realistic graphics and physics.
If graphics really didn't matter, the Wii would keep selling and be number 1. But the 360 now does motion control with better graphics and suddenly it sells better than the Wii. For many people, graphics do matter.