For the few things R2 is missing in its graphics, its still putting on an impressive display. Scale and number of enemies are more likely the reason why its missing a few things, rather then anything on Insomniac's part. They are simply trying to stand out in a different way then most games are.
I like great graphics to enhance the experience in a singleplayer game, but in a multiplayer game with so much going on, I'll settle for good enough graphics and more importantly a stable framerate.
See, this is also how I feel. Rather than just push the envelope with pretty visuals, they want to move in another direction and offer something no other developer is offering. Scope and scale are two things that have been sorely lacking this generation.
How many games have we played this generation with hacked in Co-op? Even RE5 looks like it's force feeding people some hack job co-op with a new character. Insomniac decided to do something entirely new and innovative for online co-operative multiplayer in a First Person Shooter. Instead of just offering campaign, they offered massive battles that have great replay value.
Sure, we've all played 16 player shooters with smaller maps and vehicles, but how many of us have played 60 player maps?
Even more importantly, why does the 16 player title only look marginally better than Resistance 2? Even the much smaller Gears of War doesn't look like it's a generation ahead of Resistance 2, with 1/6th of the player count (and smaller levels to boot).
These things are all infinitely more important to me than "that texture looks nice" or "that brick is casting a shadow on my characters foot!".
I don't mean to belittle anyone, however, you can easily see that the better looking titles are often the ones that have the least replay value.
Bioshock
Uncharted
Army of Two
Assassins Creed
GTA IV
Unreal Tourney 3
I'm sure there are plenty more to add, but Single Player or Multiplayer, these games all expired long before many thought they would. Who is still talking about Assassins Creed? Once you get over the visuals, the game itself was rather shallow and repetative, with a story that I personally thought was poor.
I would argue that Uncharted was great, but came no where near the scope or scale of R2. Insomniac needed to use 1 engine to create 3 different components of the game, which all support massive amounts of polygons and particle effects. To knock them for not giving you a nice texture on some walls, or shadowing on crates...is just over the top, IMO.
They've certainly made their achievements, and worked hard to get where they are. To sell them short, or pretend that what they've done is some sort of betrayal to fans is ridiculous. They are a company, and they are certainly looking to the market to see where the money is. I don't hold that against them, it's what they do with that direction that counts. With Resistance 2, I think they've offered up a meaty shooter with plenty of depth to keep players coming back for more, while making it accessible enough for new players to get into it quickly and have fun.