There's FAR more to it than mere graphics. the devs have to have the right mindset, have to implement it properly, set the atmosphere right, have suitable protagonists and antagonists, etc etc, and you have to be in the right frame of mind to make a scary game work.
Graphics can go both ways, encouraging imagination vs realistic detail and suspension of disbelief vs breaking immersion. Animation, voice acting, pacing, characters, enemies, map design, scenarios - all these have to work together to make it work.
I'd argue that and reduction in scariness these days is either a) you're getting desensitised or b) the developers are not balancing their priorities, focussing on graphics over the other aspects required in order to make a complete horror experience.