Yes! Another step forward in the field of graphics.. Soon we may see graphics approaching eye level quality
Basically, it's a MASSIVE amount of work/cost to create individual blades of grass that independently react to a person walking on them, vs just pasting an static grass texture on the ground. And unless the movement of the grass is really important to the story, it will never be cost-effective to create all the art work, physics, CPU processing time, and disk space to include it.
Interesting theory at least.
It may be that instead of looking at rendered photo-realistic grass, one may be better of going out touching the real thing.
As for the artificial realm, who cares if it isn't photo-realistic? It is artificial anyway.
The algorithms to control grass reacting may be difficult to write, but that only has to be done once. You could as well have said ten years ago that it would never be cost-effective to create photo-realistic CG films, but that has been pretty much accomplished at this point, and game developers are already borrowing techniques from films.
Also, the great thing about games is that they're not necessarily meant to conform to reality as a standard. If you want photorealistic graphics, go outside. A game that relies primarily on its graphical fidelity is doomed to obsolescence, but a game with good mechanics and an aesthetic is potentially timeless.