I'm pointing out that the correlation between graphics and a good RTS game isn't that strong.
That being said, what I look for in terms of graphics is utility and style. Graphics should tie into the gameplay instead of distracting you (unless that distraction has something to do gamewise). Also, everything should look like it belongs together, as if designed by the same hand. Imagine how awkward photo realistic images would look in diablo 2.
Graphics for the sake of graphics are nice, but I'm playing a game, generally graphics get high marks if they contribute to gameplay and storyline. Game engines can't prioritize graphics because most of the cpu power is needed elsewhere, even when a gpu takes most of that responsibility over, the priority is frames, not high-quality renders. In starcraft 2's case, it has to approximate the fastest setting of a game that could run on a computer with these specs in 1998:
windows95+/windows NT 4.0+/mac system 7.6+
90+ mHz CPU (low for even that year)
16+ MB RAM (probably about average) / Mac: 32 MB for MP plus virtual mem
80 MB hard disk space (easy to come by then)
4x CD-rom (if you had one, it probably worked) : 2x without seeing cinematics
SVGA video-card (no video memory specified)
direct-x 2 compatible (windows), default mac card
These were low settings for 1998, and for good reason. Chances were that people interested in SC already had suitable computers to use and didn't have to worry much about buying a new one (expensive) and learning about the growing need for cooling systems. Therefore Blizzard's consumers had one less obstacle for buying the game, meaning blizzard would probably stay financially solvent when releasing it (it didn't enjoy a cash cow like WoW back then).
The problem with ramping up the graphics in a RTS can be seen by running WC3 on lightly seasoned computers when it was released. Get a significant number of units on screen, the game slowed to a halt. Get enough in the game, a server split occurs and players get disconnected because their computers can't keep synch with the server. Don't ignore that SC2 won't be able to monopolize enough of the cpu, as operating systems and necessary software must run at the same time.
One could always buy a new computer, but that means setting several thousand dollars aside, and pissing off the people who don't want to replace the computer they got 1-2 years ago. Not everyone can afford to buy appropriate gaming rigs. Blizzard would lose money by setting the graphics unnecessarily high (by default...), which doesn't make sense from a financial standpoint.
The other problem is that limits are being reached on how much hotter the oven (case) can get with all of that "horsepower". Liquid-cooling isn't cheap. Phase-shift cooling is downright expensive. More importantly, not everyone who uses a computer realizes how important cooling is, why make a game that could start a house-fire from hardware requirements. (Okay, I'm exaggerating, but it's noisy fans or cooling education, too much computer literacy for some people). That being said, your "horsepower" is actually going to be pushed to its limit, just not doing what you think it's doing.
I'll comment on this
Diablo 2 wasn't pretty back in the days when it came out. I played it anyway.
Star Craft wasn't pretty. I played it anyway.
Star Craft 2 looks awful. I'm going to play it anyway.