I've always seen this as a matter of fidelity. When creating digital graphics while new novelty can give you a temporary pass there's a certain threshold level in the technology you need to reach reach before you can start good results that can stand the test of time. Like for pixel graphics, no matter what you do you're not going to make something that's 'aesthetically pleasing'. Same problem extended to 8-bit games, it was almost there and maybe you can give some games a pass but overall the technology is still too limiting. You needed the jump to 16-bit before you really reach the threshold that the pixel grahics can still look good today - and many smaller scale indy games are still made to that standard.
So the problem with the PS1 gen for 3D graphics id it was basically where the NES was with pixels. SNES/Genesis 3D graphics (Starfox, Virtua Fighter 1) were basically Atari level, and the PS2 gen was the SNES-like jump to a reasonable minimum standard. Games like Metroid Prime, Shadow of the Colossus, Okami, etc, they may not have had the horse power but the aesthetics really shined through.
Kind of the same thing with movies. While George Lucas didn't have all the fancy computer graphics back when he first made Star Wars, with what they did have the industry just passed the threshold to start making sci-fi moves that leaves no suspension of disbelief like Star Wars, Alien, Blade Runner, etc. The watchability of these movies would probably take a huge hit if they were made in the 60's or before.