There are reasons for that:
1. Devs are going for more accurate algrithms that have greater performance costs but have diminishing returns. The cloth moves a bit more realistically but is twice as more expensive when it comes to performance.
2. Devs are going for expensive lighting solutions like global illumination and ray tracing. More expensive and realistic than cube maps and also requires less skill and time from devs. But it becomes a generalized solution rather than carefully and artistically placed lighting from ps4 gens. Does allow for better transition from day to night and vice versa though.
3. Games are far bigger and extensive nowdays but budgets have actually not increased as much from ps4 gen( well atleast comparatively to budget increase from ps4 to ps4 and previous gens). So dev focus are divided.
4. To mantain budgets, a lot of companies are relying more on cheap outsourcing( outsourcing can be good but good costs money and companies money pinching go for the cheapest solution rather than one with best quality) and junior devs as they don't want to pay expensive salaries of senior devs( half AC shadow's dev team, for example, is new to game development,
https://www.theouterhaven.net/2024/...eed-shadows-devs-are-new-to-game-development/).
5. Art style requires skills, and due to constraints on power previous gens relied more on it. Currently, power is not as abig a limitation so devs go for more expensive higher quality textures and more realistic looking models. More accurate to real life but often less aesthetically pleasing.
6. Nostalgia often as users remembering previous gen games looking better than they actually did. Recently went back to gt sport and it looks so much worse than I remembered in comparison to gt7. More washed out, smaller color range, worse texture quality, just worse in every aspect, whereas I always remembered it looking not that different from gt7.
Not every point applies to every game but in general this should sum it up, imo.
