Better? No, GOOD? Yes. Bioshock wouldn't have been the game it was if it had dated graphics the original Resident Evil worked that generation because the graphics were a step up to 3D and a level of realism in gaming we hadn't seen before, but if you went back to play it now having never played it before, it's nothing, the scares are gone, the creepiness is gone all because the game looks like ass. Great games will always be the ones that have the best game play and story, the greatest games will have those plus good graphics. Why? Because visuals that don't work with the game that is being presented can ruin the experience. There is nothing so compelling in games as being able to identify with what you see, being able to believe that this is real. Sure Fez is a great little game, as is Minecraft, but those games serve a particular purpose, their reduced graphical style suits the games they are and they are better for it. For a Bioshock, Elder Scrolls, Fallout, Splinter Cell, Mass Effect, CoD, these games poor graphics will kill them, but better ones make the games better. Would any of the events in ME have been anywhere near as exciting and moving as they were if the game was a 2D side scroller or had the graphics of a PS1? Not a chance. Aoife mentions the dead eyes problem, which is very real in a lot of games, but some games don't have it, GoW was particularly good with it, ME did a fair job. Is is also worth mentioning here that even though the dead eyes can be an issue, other aspects of the character models can more than make up for it. Look at a video from ME3 when Shepard rejects Miranda, there is a moment when we can clearly see her face fall from hope to despair, and it makes that scene very very touching. It's a fantastic moment that just wouldn't have worked with poor or average graphics.
Games with stories that try to make things personal, like ME has done, will always need the best graphics they can get to improve the experience. There is an old saying, a picture paints a thousand words, anyone with a background in theatre and performance (that would be me) or anyone who has seen a silent play or film will know the power of a picture or a scene. Good graphics has the same principle, you can tell great stories without them, but some stories need them.
Yes, we need great graphics, they're not the be all and end all of gaming, but we DO need them.
“It's a movie. If you are going to believe and be affected by an action film, you shouldn't go to see Pocahontas because you are going to think you are a Disney princess” Chloe Grace Moretz, what a legend.