It's never completely gone away, although it's much more popular now that sad old men with disposable income (like me) are nostalgic for that past. But the difference is that it isn't necessary now. You can essentially have photorealism, with greater or lesser fidelity, without taking any shortcuts to tell the audience that an image signifies something other than what it immediately appears to be.Hand drawn art existed after the PS3, right?
I would say that started sometime in the late 2000s. So to me, nothing after that can be retro. I also think that graphics don't ever really need to be better than they were at that time, and that games need to regress to that level of visual fidelity. So I'm not impartial here, is what I'm saying.