Firstly I'd like to say that it was this thread that finally convinced me to actually join the Escapist forums, as I feel that this is an area I might be able to contribute in and get some intelligent conversation going, so thank you Mista Stevo.
I believe that far too many people confuse graphics with 'visual aesthetics' for one is purely for eye pleasure and and the other rather ambiguous, covering so many lovely topics such as colour palette, form and silhouette, rendering technique and how it may well relate to a user who has more to do than stand, stare and maybe drink fine wine and discuss how the paint flows or that the nose is wrong.
Essentially, theres making a game look nice to make it aesthetic, memorable, charming and so on, and then theres making something look good to be functional. Both are important. to gain an understanding of that quickly, I highly recommend visiting both of Yahtzee's XP articles on character design, as they explain the practical use of visuals. Ultimately, being able to see things is something that Doom 3 didn't pick up on imo. That and that game felt like stale bread.
I feel that it's also important to note that game designers and artists might not be the same, even if they are both in the same dev team. Even better is that they have to work together to produce something that is both aesthetic and functional. For example, a ghillie suit should effectively match the surrounding grass. This can't happen if say, the contrast between the two is too high, and too effective if too low. Likewise Team Fortress 2 would not be so great if the Heavy wasn't so easy to recognise, or if the team colours were grey and brown instead of the simple blue and red. These are decisions from a graphics design origin, which serve to make the gameplay portion more enjoyable.
It is obvious that publishers and developers would put a lot of time and effort into visual aesthetics because it IS advertisement, but at the same time advertisement is ultimately the reason why many of us even get suckered in and buy games in the first place. A cel-shaded game or a game that claims to push the boundaries of our hardware, or claims to imitate life naturally picks up more attention and perhaps admiration, if blind. Advertise visually first to get early adopters, maybe release a demo depending on the risk. It doesn't help that gaem design in itself is a bit ambiguous too.
In short, graphics and gameplay go hand in hand with each other. You can't seriously say that you'd play a game that looks awful, because that would actually mean that you wouldn't be able to see anything, worst case scenario your framerate will drop significantly, all while the enemy AI fires bullets auto-aimed for your skull. These factors actually bring harm to the gameplay part. This makes both parts of this as important as each other.
I do wish more thought may be put into actual game design, and innovating something beyond the high poly version of the 40mm underslung grenade launcher and the amount of UV space dedicated to its normal map, but you can't have one without the other in order for a modern game to be enjoyable. Again, the investment in high visuals is an understandable one, but remember that its absence would only make the game worse. I don't think either should be sacrificed in favour of the other.
Slightly Off-topic: You think the graphics versus gameplay war is bad? What happened to background music in multiplayer FPS's? All that adrenaline pumping goodness gone because someone cared far too much about the sound of footsteps or something? I'd like some music designed to fit with the game as well as it enhances the gameplay. I also apologise if this is tl;dr.