The demoscene has always been about real-time graphics. It never sought to compete with video animations. Many demosceners were, at heart, game developers who valued and appreciated real-time code, often considering animations to be "lame".
When we saw Commodore 64 demos for example, they often impressed even relatively non-technical people.
But today a demo that pushes the limits technically will often only look impressive to those who understand the technical limitations.
That has significantly changed the potential audience to a diminishing subset even if relatively technical people.
It was actually what put me off a bit -- I enjoyed the demoscene to learn new things and to experiment with computers in total freedom. I had no need for artificial limitations set out by competitions, and never really cared much for the gatherings of socially less developed boys who smelled pretty bad (even though I exactly matched that profile myself :).
I really liked the contrarian groups who faked a lot. In Nooon's "Stars" (1995) a 3D bee is rendered with a complete wing missing, to fake a high poly count. "Transgression 2" by MFX may also be a good example of what I am trying to convey here. Obviously it was not real-time ray tracing, but what was it? It puzzled me for weeks!