It is a very cool tool, but not a silver bullet, just for context.
The way it goes is: use high resolution models and textures, always, rely on the engine to render everything in real-time (with techniques like raytracing), realize that no reasonable GPU can run the thing at full resolution, use AI (like DLSS) to compensate, it is still too much, so use AI to generate extra frames.
The end result is often not that great, there are limits on how AI can fill-in the gap, especially in real time. For frame generation, it is even worse as it introduces lag as the generated frame doesn't take into account the latest player actions.
Video games optimization is an art form that goes beyond making code run fast. Artists and programmers are supposed to work together and use the performance budget wisely by cutting the right corners. For example, in a combat scene, players won't look at the background, so make it as simple as possible, save the details for when the player doesn't have to focus on a bunch of monsters. It may even result in gameplay changes. AI can't replicate that (yet?)
It's fine for video games to employ tricks that limit what they have to make look good on screen. Games like Silent Hill did a pretty good job by filling the world with heavy fog or giving you a flashlight leaving everything outside of a small well-lit circle too dark to see. That actually added to the atmosphere and allowed them to make what little you could see look great (for the time).
Guessing at what players might be looking at and making everything else look like garbage is doomed to fail though. It punishes anyone who dares to look half an inch away from what the designers think you should be paying attention to, is distracting even if you are trying to focus where they want you to, and anyone who wants to take a cool a screenshot of the action gets screwed as well.