Quite simply because they could. Why not advance if you have the option? The transition from 2D to 3D especially opened up tons of options for game developers to better tell stories or display a world at least. Not to be confused with the general quality of the graphics themselves which have little bearing on how good a game actually is.
If we were to consider the quality of graphics and animations as an extension of how good the game really is then:
This
would be considered better than this
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My point being, even back in the day when games had primitive graphics and crude animations, they were still fun and are still considered fun by today's standards. Graphics and animations don't make a game good or fun. Pretty to look at? Sure, but not fun.