There is nothing that humans do that cannot be art when given the proper context; games are art because we say they are. Bad art, cynical, crappy, corporate art is art. And video games, whether someone sticks their hand in the soup with crappy post-processing effects or not, will always be art.
Also, there's something hilarious about using Sonic Adventure 1, a game that famously made such good use of the Dreamcast's unique hardware to bring out a sleek, unique Y2K aesthetic that it was utterly butchered when placed on less-fitting hardware (yes, Sonic Team themselves also did a bad job, but that's beside the point), to illustrate how apparently this was the wrong way to do things. If it proves anything, it's that we should have been squeezing way more out of less-powerful hardware decades ago, and just streamlined the differences between platforms more quickly. Baked lighting and vertex paint is still a perfectly legitimate and often surrealistically-beautiful aesthetic, it's just that stuff like real-time lighting is easier to market with the good ol' shiny screenshots from the Deus Ex 2 video, or else allows a scene to be lit faster than catering each palette or paint to a specific mood. None of this is a defense of aggressive and unflattering post-processing either way though...because it just doesn't look good! And it's not ugly because it's realistic, because it's not realistic. It's ugly. New Vegas looked a lot more real when I changed it to something actually natural looking, and it didn't stop communicating a dilapidated wasteland in that. Elden Ring is a fantasy game, but an annoying vignette cutting off my peripheral vision made it neither more real nor more fantastical, it just annoyed me.