Well first, I didn't take what you said out of context. You said games have always been about utilizing the latest in visual technology. That's a hell of a way to say "Well graphics aren't really the biggest selling point per se..."
Regardless...is it a selling point? Absolutely. Is the number of people who buy games based on the graphics (or at least, who take graphics into consideration) large enough to matter these days? Simply put, no.
Look at the PS3. Sales are slow, developers are looking elsewhere and the high price is scaring away potential buyers.
Had Sony followed their previous tactic and released an affordable, somewhat powerful system, the 360 and Wii would have probably already been crushed under the Playstation brand name alone. But they pushed graphics too hard, raised the price and it seems like nobody really cares, even if games like MGS4 and FF13 can't be had anywhere else. So let's not pretend that graphics matter as a selling point, because overall, they really don't. Ask Brain Age or any GTA game.