Ever played Alone In The Dark? Myst? Now those were painted by proffesional artists single handedly, nowadays it's mostly Modellers who make the game world that's why often times the game lacks depth or real atmosphere, almost feels like plastic.
That's why I say, that sometimes I think a lot of Dos Games beat some modern "Maya, 3ds MAx" Games graphics wise.
You know, you sound very old. "Back in my day we didn't have all that 3DS Max Maya graphics. We had to look at hand painted artwork, and it was much better!"
You know, people still paint and photograph textures and put a lot of work into 3D games. It's still art, just more hardware-intense than before.
And if you look at games like Braid (which is VERY new), it's clear to see that the hand-painted style is still being used, it's not just some kind of dead fashion.
And look at games like Dreamfall. Horrible gameplay but the game feels like an art book.
All in all, it depends on which games you look at. I think it's unfair to make such a generalization.