Texture Filtering + Higher-resolution Screen = Much Better Graphics
I really think those two things are the downfall of the DS's graphics. On the one hand, you can clearly see that the textures aren't filtered. That in itself is bad.
But the fact is that the resolution is still very, very poor, so no matter how nice the graphics are, there is going to be a physical limitation to the amount of pixels that can be displayed. Even as developers become better at programming the DS, the screen is still only going to have a poor 256x192 resolution. I would've either went with 480x320 (marginally better than PSP and the same ratio of the GBA) or 320x240 (the same or better than probably 90% of all Nintendo 64 games and the same ratio as the current DS resolution).