So cardboard cutouts aren't in the equation for making a game look bad? Then let's throw out the AA argument with power lines in Drive Club, if you're going to say the surroundings aren't relevant.
Terrible statement on your part.
Environment, including crowd, is part of the game's visuals. If they look like garbage then they look like garbage. If you don't think that crowd looks like shit then you're absolutely full of it.
Can't really compare jaggies to cardboard crowds, so don't even try. Ones affect to general IQ and other are annoying only on replays or doing 10mph.