The people developing The Last Guardian are capable of much more than Yooka-Laylee people. The reason why I expected better graphics is because the PS3 version looked VERY good. I expected that to stay true with the PS4 version. I am finding it strange that people here are acting as the graphics cannot be improved because this is "Ueda's vision", as if they know what that means. As far as I am concerned, his original vision was a game with some of the best graphics on its hardware. Also, team size is clearly irrelevant, just look at The Tomorrow Children.
You're making wide assumptions that has been proven otherwise by officials at SONY. You are comparing a PS3 game, which, is reported to run horrendously, indicating the game was not suited for the hardware. You're equating "best" of the PS3 when he clearly went above and beyond that around the ballpark of the PS4, which you are observing right now.
Second, nobody stating that graphics cannot be improved, you need a very high budget to push the visuals high and Team ICO clearly does not have the facilities to operate in such a way. Trying to use the Tomorrow Children as an example does not help you because it doesn't have the environment complexity of other high tiered titles like Uncharted or Killzone. The Last Guardian is already dealing with extreme physics that react on momentum not to mention the sophisticated AI behind it. If you want Ueda to simply create a 5 minute tech demo than I'm pretty sure he could blow Uncharted 4's graphics out to the stratosphere.
If you makes you feel better there is no estimate time for 2016 for the game to be released. As far as I know this extra time could be used to polish up the graphic further although I would very much prefer they get the AI systems correctly because that is a make or break for that game to succeed. The graphics now, as far as I'm concerned, is beyond satisfying especially for the team and budget required.