I think that the OP is convinced somehow that good graphics and good gameplay are mutually exclusive. Graphics are done by the art department mainly while the actual engine is done by the programmers, and UI done by the UI designers, etc. Now obviously when everything is integrated together, there is a lot of interaction, but I maintain that it is possible to have both good graphics and good game play ... in fact it is one of the hallmarks of a good game.
The mutually exclusive bit already came up, I already refuted it. Don't think that at all. What I'm talking/thinking about is something like this:
Total budget for game is 1000. 250 is allocated to graphics, 750 to 'rest' of the game. The 'rest' portion has issues, as we all clearly recognize at this point. Would shifting 50 or 100 from graphics to rest have allowed then to deal with the shortfalls in "rest"? Get both areas into the acceptable level rather then one at exceptional and one at fail? And I don't know the answer to the question. Its just something I wonder about. If I were designing a game, graphics beyond 'minimum to do the job' would be my lowest priority because I personally don't find them very important to my gameplay experience. That's not saying that the wouldn't BE a priority, just that they would be the lowest one. It also isn't to say that I wouldn't want the game to be as pretty as possible or that I think performance and pretty are contradictory. Its just that getting performance would always come first when I was picking between pretty and performance.