Uncanny valley, Turtle. Sure, there is a middle ground between Mario now and
this. But... to be honest I feel like Mario has more visual identity as-is. I'd put the limit at how the Mario characters look in Smash 4, not wanting to veer off and have Peach and Rosalina look like Disney princesses. I'm tired enough of Disney's samey CGI without any outside help.
Mario Kart 8 is full-stop gorgeous if you ask me. I want that art team on every Nintendo project. Their take on Hyrule is fantastic, their take on Mute City is spectacular, every other track in the game is breathtaking, I love it.