In the field of MMORPGs, it does. There's no MMORPG out there with graphics as advanced as FFXIV, and there won't be one in the foreseeable future from what we've been shown so far.
Comparing MMORPGs with other genres of games that don't need to display even nearly the same amount of characters on screen is nonsensical.
It's like saying that Total War games have ugly graphics because they aren't as detailed as Farcry. Yeah, they need to display thousands of soldiers on screen. That'd do it.
First of all, FFXIV has normal mapping, not bump mapping. Your argue about graphics, but don't even know something this basic. It's a very widespread effect in "modern" engines. Funny that you talk about modernity, and then dismiss one of the most widespread indications of an advanced engine. goes to show how much you're talking just for the sake of spouting negativity.FFXI looks better than this game. Sure it has low res textures and polygons, but all FFXIV did was increase polygons and add ugly bump mapping. Lighting and shading makes a WORLD of difference.
Secondarily, the lighting engines in FFXIV is quite advanced, the fact that SOME effects are static in order to save resources and memory doesn't change that.