I mean, how and why would you improve on that?
Are you serious? Graphically, we have miles to go yet.
As someone who owns Crysis and can run it on max settings, I'll admit that it's incredibly detailed, with razor sharp textures and amazing effects. But it's let down somewhat by it's lighting, which I've recently come to realise is the most important aspect of how 'real' a game looks.
Most games go overboard with lighting effects and often look too exaggerated. That GTAIV mod linked earlier is an example of how to get lighting right. It looks incredible at first glance, but if you look closely at the cars and the textures, it's obvious that they're not all that great. It's the hyper-realistic lighting that makes it so incredible - it's lit like the real world is lit.
There are a few games that pull this off well - ARMA springs to mind. Bad Comany 2 did it pretty well too. Textures and polygon counts will only get you so far, and might make for some incredible screenshots, but where it counts, i.e. something bombing along at 60fps, more and more advanced lighting is where it's at.
At least we've finally gotten out of the DX9 OMG let's make everything SHINY phase.