The problem isn't graphics. The things they are pushing this 2005 engine to do in 2013 are things it was never meant to do. It's the reason the games gradually get worse every year: too much added shit for a 2005 engine. It was already bursting at the seams for all the innovations MW2 had. Black Ops, MW3, and BO2 are really breaking it apart.
It's the same reason every game has the same issues: quickscoping, bugged lobbies, prestige hacking, XP boosting lobbies, the private-game-showing-up-in-matchmaking glitch. It happens every year because they are using the same engine. They either don't have enough time to improve anything because Activision makes them pump out a new game every year or they simply don't care because they know how much cash each game makes.
I really wish CoD would take a year off to make a brand new engine and really bring it up to speed. But they won't, which is why I can't wait to see what Respawn Studios has in store.