So while I'm not disagreeing with your main point, I suspect that the market "is crap" for the same reason it has been for sometime--Bitcoin douchebags.
Once again, I'm not going to dispute anything you've said here, but, uh, I think your second paragraph undercuts your first one--how many games (and how many gamers) are really trying to see their games look like movies? (In fairness to the gaming industry, if we're talking strictly CGI, I've seen movies made in the last 2-3 years with CGI that looks worse than most of the AAA games of the last few years.) "Cinematic" games seem to be moving back in the direction of FMV rather than attempting to move forward to the notion of realistic-looking computer-generated human models that are voiced by actual humans, because it's a technology that is fully mature (in my view) now, where it was not 20 years ago. Personally, if I look at a game like The Witcher 3, Mafia III, or Diablo III--really any game with the number 3 in the title--I think, "Hey, there's nothing wrong with the way that looks." Maybe photorealistic graphics are an objective of the future, but I just don't see that many folks clamoring for it today. Honestly, I'm with Mooby--who really needs ray-tracing? I have yet to see a single feature on any card at or around $1,000 that made me think, "Yep, that makes it worth it."
EDIT: On a side note, playing the crap out of Spider-Man. Still enjoying it. In the middle of the Turf Wars DLC.