AAA 3D gaming isn't only about the games but was also a way for the security state to incentivize development of certain kinds of hardware broadly applicable outside of just graphics. SEGA were directly part of the paradigm shift from war-focused development to entertainment-focused development in the early '90s with their whole "omg look at our Lockheed tech!!" era. That was right at the fall of the USSR and end of the Gulf War when war became (briefly) publicly unpalatable, so the demand to keep working on this stuff had to come from somewhere and the somewhere is us :)

There are games like this, just look for pixel art games. E.g. Terraria, Stardew Valley, Enter the Gungeon, etc

Ok, try this :)

https://youtube.com/watch?v=Wlq6fFOqI28

Plenty over on itch.io .

Because making decent 2d graphics requires more skill than decent 3d.

Put the minecraft textures in 2d and it is utterly horrible, but in 3d with shadows and shaders it starts to look very good.