I don't know about next-gen, but I will say that GT players have been waiting a long time for smoke like this. It looks the same as GT5's smoke, only it's a lot thicker and it sticks around a lot longer (as tire smoke is wont to do).
As for the DOF argument, the TV isn't showing you what your eyes see, it's showing you what a
camera sees. Your eyes don't have lens flare, either, did we have this argument back when they started using that, too?
Hell, they're pushing it even further these days with the whole "dirty lens" thing in games like BF4, an effect that only happens on a camera lens. But before that, there were plenty of games that would splatter the lens with dirt and blood. That doesn't happen to your eyes, either. And now you're complaining because it doesn't
focus to your liking? Movies have been doing this for over a
century, I never heard anybody complain about that. DOF is used for a reason, to focus the viewer's eyes on what they're supposed to be looking at. In a movie, it might be a character talking. In GT, it's a car driving.
As long as games are displayed as a series of 2D still images on an illuminated screen, there will never be any way to truly duplicate what the eye sees.