I agree wit what the OP is saying, put more resources into design than graphics.
While this is true:
you have to admit it's partially because the game was rushed. By the time they finalized the engine, the game had been announced for 2 years, and right after that was announced for the XBox 360. They needed results and the game was obviously rushed.
One solution is better development schedules. Like Gran Turismo 5, they can take all the time they want for all I care, just make it an incredible game.
Also, I think the next few games will be better, they'll have more time because they already have an engine. Everyone has stumbled in this HD-era. The only games that haven't so much are traditional PC genres - WRPG's and FPS because those games have been in HD long before this "generation" started.
Lastly, FFIX had crazy effort put into its graphics. The opening cinematic was jaw-droppingly beautiful and looked like it was directed by Stephen Spielberg.





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