I agree that good graphics sell better because of his first point, but if you want to make a good game rather than just sellable shelfware, they aren't nearly as important.
Yeah, they're important for drawing the player in and creating an immersive atmosphere, but at this point there's a difference between `good' graphics (which create the desired immersion) and `realistic' graphics (which have high levels of detail/poly/resolution/etc). Some of the most immersive games I've ever played are Zelda: Ocarina of Time and Silent Hill 1, and both of them have very immersive graphics, which adds a lot to the game. But neither of them are very realistic, detailed, hi-res, -def, -poly, -etc.
Graphics always matter, because other than sound, graphics are the only way to show a player what is happening in the game, which is a huge part of the interaction. But there's a difference between graphics that are immersive, and graphics with a high quality visual element. It's about how the graphics match and affect the game, not about how `good' they are. Some games are much more immersive as a text RPG than as a highly detailed GPU hog. A lot of games work better in 2D than in 3D. Many many GPU hogs are not immersive in the least.
When somebody says that `graphics don't matter', they mean that developers have lost sight of the importance of choosing graphics formats artistically. They mean that making a game `with better graphics' rarely makes it a better game. They mean that small differences in resolution do not necessarily make any difference at all when it comes to immersion. Graphics may be important in a game, but that does not in any way mean that high graphics quality is important in order to make a game good.