It depends on what the game is trying to do.
If it is pure gameplay mechanics, then I don't need anything better than good art direction with much older tech. Note that sometimes graphics impact gameplay mechanics in important ways (finding hidden objects or using icons). For example, because of the interface, which was determined by the graphics, I couldn't play Warcraft 1 these days, and Warcraft 2 would be a stretch, but Starcraft 1 is perfectly acceptable.
If it is trying to impart a sense of place, or atmosphere, or immerse me in some way in the game world, then it has to have either very very strong art direction or great graphics. Repetitive or bland textures in open world games knock me out of the immersion. I consider the opening of Megaman 2 to be great art direction that provides atmosphere, the field setting of Muramasa to be a nice combination of medium graphics and art direction, and Killzone: Shadow Fall to have fantastic art and graphics.
The problem with realism as an approach to immersion is that once you know that it can look better, it's hard to go back. San Andreas looks so much worse now, for example, because GTA V accomplished a bigger scope much more beautifully.
Strangely, I still find Far Cry 2 to be great, though it's graphics have been surpassed years ago. Probably because of the uniqueness of the setting.