The CGI argument seems a bit strange because CGI is not some singular entity, there is crappy CGI out there as well that games definitely manage to beat, it's all a matter of budget, time and manpower. As for high quality CGI games are nowhere close to it and never will be simply because you can always render more and better stuff when you're not forced to do it in 33 milliseconds or less.
As for the industry not taking the leap forward visually that we all expected I think it's again a matter of budget, all previous jumps required a massive budget increase to the point where it became unsustainable and a lot of dev studios closed down. To make that next jump in fidelity you'll need even more money, time and people and it's simply not realistic when your game needs to sell over 10 million units just to break even.
The other side of the coin is that for casual players the graphics have long reached the point of good enough and further investment in graphics won't increase your player base by a noticeable amount. The reality is that the best selling games on the market are not the most visually advanced: Minecraft, Fortnite, CoD, Zelda, Mario, GTA 5. GTA 5 has been a top 10 seller for 10 years now and is built around 2005 hardware specs. On the other hand many visually advanced games failed to attract a big enough audience to continue: Ryse, The Order, Driveclub, Alan Wake/Quantum Break, Crysis, etc. It used to be that graphics alone could sell games, but it's no longer the case.