About [1], consider this:
https://www.reddit.com/r/todayilearned/comments/4412zk/til_s...
Both the topic: 'more spent on marketing than production' and the first post 'numbers can't be trusted because of creative accounting practices'. I wouldn't be surprised if this applied to the game studios, too.
Anyway, you're essentially stating two things. One is that art students have been able to produce this level of quality for their show-reels for ages. If students can do it, it can't be all that expensive. So why did we not see it in games before, but only show-reels? Not because these students or studios couldn't translate a show-reel to an interactive show-reel (i.e., a game). Rather more likely, because there's no market for it because nobody has the money for the hardware to run these things real-time. Now we're seeing this thing render on real-time on consumer hardware that might in 5 years be affordable to mainstream audiences.
Seems to me the biggest barrier was there's no market because there's no cheap hardware that can run high-quality in real-time. Of course cost of art is a factor, a big one, but I don't think it's been the primary limiting factor.
Lastly, the cost of art at any given quality level has come down in a big way. It's offset by increasing demands. But try to buy some assets of 2011 type quality, it's cheap, while 5 years ago you'd have had to hire a big team to deliver that. Once you approach realism, the amount of improvements to quality diminish and you get a build up of cheap assets (textures, template models etc) that can be tweaked and used and bought cheaply. Assets from 5-10 years ago are like cheap commodities already, tomorrow's assets are expensive, but at some point there's a limit to quality improvements and just like every other industry (e.g. smartphones in 2016) you see commoditisation and the cost come down.