Really? So better lighting models don't improve on graphics? Are you really going there? Are you quite sure about what you've just said? You'll want to see the difference in lighting in for example a game like Quake and newer Unreal Engine 3 games, makes a hell of a lot of difference in how graphics are perceived. A lighting model is a VERY large part of the graphical interpretation of a rendered 3D world.
It's local variation computation on that steamed lighting model that makes all the difference. You see it clearly demonstrated in that video and isn't possible done in real time locally as it requires too much computing power to track individual photonic traces.
The main difference between Quake and Unreal Engine 3 isn't in the lighting.