I noticed a weird trend in Dark Souls 2 discussions about how the game looks, especially in respect to the gameplay reveal.
While I think that there was a downgrade in general lighting quality, I stand by my opinion that most of the changes are related to specific choices that FROM made to make the game more playable, because the extreme contrast, extreme darkness and crushed blacks of the gameplay reveal would have made basically all indoor areas unplayable due to the fact that you couldn't see the enemies before they came very near to you even using a torch.
But in the side-by-side comparisons between gameplay reveal and retail game, like
these for example, the retail game images look very bad mostly because the brightness at which these images were taken is completely wrong.
In fact, every time I read someone writing that DS2 "looks like crap" they always refer to these images or videos, and when someone writes that "the torch is not needed" I think that both criticisms come from an incorrect brightness setting while playing the game.
To me, the game should be played with the in-game brightness set all down to 0, and without strong backlighting from the TV (this obviously also depends on the current light level of your room). Also, high contrast (white levels) and mid-to-low brightness on your TV settings help. Setting in-game brightness to 0 brings all the darkness everyone is craving for, and makes the torch practically essential to properly navigate caves and close environments. Also, it makes the game look really gorgeous: even with the downgrade, and the fact that the lights are not always consistent - not every source of light casts shadows, but I guess this is related to resources optimization - the lighting is beautiful to look at. The real ugliness, in my opinion, comes from the fact that certain specific areas have repeated textures that look bad and break immersion, but that's another story.