To the OP, I'd argue that the last few decades of generational updates to console hardwaredriven primarily by a demand for graphical upgrades predominantlyreally fly in the face of your argument in the OP.
Even to those making arguments about a distinction between enthusiast, casual and forum-dwelling hardcore gamers; I'd argue its almost impossible to argue that graphics aren't one of the most fundamental features of a game in either of these three groups.
To every gamer of every shape and mindset, graphics are the first thing said gamers see and/or appreciate about a game.
If the argument in the OP was framed around a position that graphics don't need to always be on the absolute cutting edge to be appreciated by gamers at large, then I'd agree, but then this is so obvious when we look at the most successful games as your data-points so as to be a truism.
The argument in the OP, however, is framed around the proverbial graphical "arms-race" as it pertains to publishers. Which is an untenable position to argue like the OP does without presenting any factual data at all. It's pretty clear that publishers are confident in the knowledge that their customer's demand a certain level of visual fidelity as a baseline each generation, for their games to overcome being seen as "dated" graphically.
On the other hand, the OP's focus on graphics, in relation to the problem of development budgets is a slight myopic. The bigger issue is the increase in gamer's demand for more gameplay value with each passing generation. This isn't just about visual fidelity (e.g. even at launch, Destiny wasn't the best looking game, despite being one of the most expensive), but the demand for higher visual fidelity in addition to a bigger scope only compounds the issue.
It's a fact that gamers want more game content for their money, with gaming tastes being geared more towards games with more open-ended and less linear structure. This is apparent even here on NeoGaf. This means more content, as well as "above-the-baseline" visual fidelity; which compounds the problem as it pertains to the costs of asset creation.
E.g. If the cost:
(i) to produce each individual piece of game art increases - with pieces needing to be more complex and created with a higher fidelity
(ii) to produce all game art assets increases - due to a demand for more open-ended structure implying more game content, i.e. a larger scope
(iii) to make all game art more interactive - through higher fidelity animation, more interactivity mechanics and more time needed for things like collision detection setup.
...game budgets will invariably increase, and will do so super-linearly.
Regardless of your feelings on the subject, OP, the expectations of gamers for marked improvements in game scope and fidelity for their newly purchased new-gen consoles, invariably increase with each generation. The PR declarations of publishers you're arguing against are based on an observation of real market dynamics that go beyond the feelings of an individual based on what he/she has subjectively seen on an internet message board.