That happens when you play a game at lower settings

OMG NOW THAT I'M PLAYING AT 1600x900 WIDESCREEN THE GAME IS HORRIFYING
Seriously, that has nothing to do with it. I played the game at moderate settings and it still wasn't scary. Besides, 80% of the immersion is simply found in the smoothness of the animation - and at my settings I maintain 60 FPS easily throughout the game, so that's not an issue.
If you want to be scared of something, you need to feel constantly threatened and unsafe. Stuff like a foreboding atmosphere (blood on the walls, pentagrams, demonic whispering) can help, but on their own they become remarkably un-scary after just spending an hour or so around them. Therefore, in order for the game to remain scary, the horror must be maintained by the monsters themselves. And this works at first when you only have a pistol and you're not sure what all you're being put up against, but once you realize how exploitable the gameplay is and how easily the monsters fall under your onslaught of weapons, there's nothing left but cheap scares and startling encounters. Which, ironically enough, are ultimately not very scary at all.
Same goes for Dead Space - that game is fairly scary and unnerving at first because you're weak and unfamiliar with your surroundings, but after a few hours you actually become quite comfortable with the gameplay and effectively escape all feelings of tension.