Dont know if it is the case but often repair and tweak takes more time than doing from scratch in so many things....
It depends. Artists already use lots of procedural creation for things like noise and textures, or even terrain generation. Or even, artists take a base model and then change it to generate a new model, such as a new pose. If the generation algorithm sucks and it places chairs on tables and coffee cups in the light fixtures, the cost outweighs the benefits. But get a good algorithm and the player should be able to walk around a town with it looking authentic and without that needing an artists hand for every feature.
Let's just say there are reasons for jobs like set decorator, home/interior designer and such; and even clutter requires a lot of work to become realistic.
Most homes etc. don't use interior designers!
And all of these are required if you want to set a mood with a set. No computer can do this, at least not yet.
It wouldn't have to be perfect. It'd just need to be a step up from the constant repetition of the current systems. A street shouldn't be a street made out of building models 3, 4, and 7 of ten, but of buildings that look different enough to add variety.
Sure, a massive RPG might not have need for such things but most FPS/TPS games will focus efforts on the player's path.
Depends on the game. As with all games, where not every tech is suitable for every game. A linear path may well benefit from a full artist's approach. Anything that doesn't need that level of attention, where the scenery isn't a focus, can get away with the cheapness of automatic generation IMO.
As for what failed with us, simply procedurally altering colors in a texture is never going to work well enough, especially if you see a lot of the same stuff near each other.
I agree. It'd need a better starting point than this-gen-with-colour-tweaks. It's amazing how sensitive people can be to repeating patterns, which is a personal pet-hate I have with some Speedtree. I don't see the fact it hasn't worked well up til now as proving it'll never work though. If we think of NPC behaviour, the holy grail is sophisticated AI, and not designs hand-tweaking every NPC life-cycle and interaction. By that same token, if these AI NPCs could go shopping and decorate their own interiors, the insides of buildings would be algorithmically generated. If AI would work for that in an open world, then it'd also work for on-the-fly decoration where the same AI decorating principles are applied to a room.
If we're to have more realistic worlds next gen, and the generations beyond, we're either going to need a gazillion artists creation thousands of individual homes at exorbitant cost, or a very clever algorithm that does for homes what Terragen did for landscapes. Or we just don't have any improvement!