The problem is, this is still a game that aims to please a huge player base, not just the sim player base. And for that, graphics matter. We just need to go back a few months, to the copper box event, when people trashed the game's graphics, through non-direct feed youtube videos. This just shows how much graphics matter to the casual gamer.
For the physics, it's usually a hard thing to master and make it fun for everyone, at the same time. Sure, the more realistic the better, in theory.
I totally support better AI, overall better physics and better damage than we had in GT6. But when it comes to physics, all that complexity that is often mentioned in this forums, less grip outside the racing line, changes in grip on every single type of pavement/time of day/temperature, brake fade, and so on, should not be a priority for a game like this. The priority, should always be making the cars feel realistically different from each other. This is where the complexity in physics should go. Old cars should feel like old cars. FF cars should feel different from each other. This is how GT should be unique, having a fairly diversified car list (well, it was diversified atleast, let's see if the same happens post release with DLCs) and all the cars feel different.
A good comparison, would be Battlefield. It could be extra realistic, they have the team and budget to do so. Yet they chose not to. Why? Mainly because ultra realism would kill the casual fanbase that corresponds to the majority of the sales. A great example of their approach in the opposite way to realism, is the amount of automatic weapons in a WWI game. Sure, they could, for the sake of realism, make the game full of non-automatic weapons, but then it would be a franchise killer when it comes to sales, because most players are still used to the mainstream FPS where they can "spray-n-pray" all day long and does not require a monstruous amount of skill to succeed. Hell, people already complain about the snipers being too OP, when, in real life, they are actually that dangerous (hard to master, but when you do, it's really effective).