Well, Minecraft is a good example of what a powerful concept alone is able to do, even if it's visually underwhelming, and it has a very strong reason why it looks the way it looks, and it's not about being retro nor anything like that, it was a consequence of being what it is: a fairly simple and straightforward procedural voxel simulator, running on top of Java (not the best choice at the time)...
In mobile gaming for instance it happens that times to times the simplest game will cause the biggest buzz in the Internet, such as Flappy Bird from a couple of years back, and it was nothing more than a game where you tapped for the bird to "jump" in the air to avoid obstacles, and it took the author just an evening to do it from what I have heard.
But 99% of the games like this in the wild, are considered from be the most absolute garbage, by developers and gamers alike.
So although I agree with you that games do not need to be AAA monsters with movie-like visuals and the like, gaming as a business has the stigma that if a game doesn't look good, no one is going to play it. And the thing is: this is demonstrably true most of the time. No matter how bland a game is, if it looks good, people will buy it. Even if half of the people ask a refund, it's still that profitable.
And the result is what you see.
In other words, gamers are actually the ones contributing for games to become less innovative, because they keep buying the same kind of games, they keep spending money through the same kind of microtransactions and so on, so there's literally no motivation for any studio to actually build a unique new game nor change business models around it, and risking their money on doing so.
It requires more passion and courage to do something unique these days, and only a few dare to do it, and from those few only some succeed, and the ones who fail loose millions, and worst case scenario (which is not that uncommon), you never hear from them again, so it's not really motivating at all.