Any game with a level of realism that is too high will end up being boring to the wider audience. You could have a game that is 100% realistic, but it would mean that in the case of say, a FPS game, you would get shot once, then most likely die shortly after that and have to start the whole game over. That sounds rather tedious and annoying to me.
While there will always be a market for different levels of realism and you will never please everyone, different genres seem to have different demands regarding realism. For example, in sports games you want the physics to be as real as possible. You don't want to be playing a golf game and drive the ball 3 miles due to poor realism. Also, the Tony Hawk games are another good example here. Things got out of hand and the tricks started to just get ridiculous. I think everyone knows that if you dropped in from some of those heights, you wouldn't pull off a sick move at the other end. You would crash and burn. Driving games probably allow a little less realism, depending on the title. Some will want to be spot on realistic with the physics (heavier cars don't handle as well etc) while others want to go a bit more on the silly side (Burnout 3 anyone?)
When it comes to Fantasy games though, I think so long as things are consistant and can be tied in with the story and nothing stands out as being much more "unrealistic" than anything else, you can get away with very high levels of "ridiculous".
While there will always be a market for different levels of realism and you will never please everyone, different genres seem to have different demands regarding realism. For example, in sports games you want the physics to be as real as possible. You don't want to be playing a golf game and drive the ball 3 miles due to poor realism. Also, the Tony Hawk games are another good example here. Things got out of hand and the tricks started to just get ridiculous. I think everyone knows that if you dropped in from some of those heights, you wouldn't pull off a sick move at the other end. You would crash and burn. Driving games probably allow a little less realism, depending on the title. Some will want to be spot on realistic with the physics (heavier cars don't handle as well etc) while others want to go a bit more on the silly side (Burnout 3 anyone?)
When it comes to Fantasy games though, I think so long as things are consistant and can be tied in with the story and nothing stands out as being much more "unrealistic" than anything else, you can get away with very high levels of "ridiculous".