I don't think you chose the best examples, OP. As much as I love both movies, they both looked equally kind of fake. However, there are some instances where they looked equally real, too, but in different ways.
While I do agree that there seems to be too much CGI nowadays, there are some aspects and features of it that I like. One thing that doesn't seem to be as important but surprisingly is so: Lighting. Yes, lighting does make a whole lot of difference, whether you notice it or not. One thing in the Revenge of the Sith battle that made it look as real as it could get was the sun coming up from the planet they were fighting above. That felt pretty real. Return of the Jedi didn't have the greatest lighting in that battle, and it looked pretty unnatural.
Another thing that made that battle real was the explosions. Granted, since there's no air in space, the flames of the explosions would be much smaller and burn out quicker, but ignoring that, they look much more natural than they did in Return of the Jedi.
However, one thing that I'll agree with you on is the over-abundance of detail. One thing that bothered me was that since you were looked at the large ships from a distance, you still saw a whole lot of detail. Every crease, every crack, every shimmer. It got annoying after a while. In Return of the Jedi, you didn't see too much detail until you got closer to the ship itself. That made it feel much more natural.
One more thing that I don't like about CGI that has been said before but I'll repeat for the sake of emphasis: Creatures. Like I said before, there's way too much detail than needed. I agree that models make is look better.
TLDR: Each have their own strengths and weaknesses. Yes, there seems to be way too much CGI in movies these days, but it can make great area, lighting and explosion effects. However, puppets/models make better creatures and can make things look much more natural. If only we used both and not just one or the other. Oh well.
EDIT: Oh, and I seem to have missed a point that needed to be made: Costs. Yes, CGI is a whole lot cheaper and makes things created at a faster rate. However, OP, since you've brought up Avatar many times in your argument, Avatar was expensive and time consuming because of the motion capture, not because of the CGI in general.