I mean, do you watch those videos and think to yourself “this is it – this is the destination – we’ve done it”?
Look, it's an objective fact that people have a hard time distinguishing AI generated video from real video. So your whole argument that "this looks horrendous and nobody could ever like it" is just incorrect. Pointing to technical problems doesn't change the fact that this could move video games towards photorealism especially while animated. It might not work out, but you're saying nothing that precludes it.
You clearly hate AI and hate anyone who likes anything about it. But that blinds you to reality.