GDC used to be better than even E3 for showing relevant happenings in the game industry but it's really not doing that anymore. The one game I was happy to see gameplay for was the MMOFPS Planetside 2 which looks pretty fun. Other than that it was full of the usual vague promises, pointless tech demos, and keynote conferences delivered by industry "personalities" who haven't actually made a game since the 90s.
This is obviously wrong as it should be apparent even to non-IT people that movie render farms use much more than 20 times as much computing power per frame than a gaming PC. What Time Sweeney actually said was that 2000 times current single GPU compute power is needed for complete photorealism. I would agree on the order of magnitude, but this basically assumes conventional triangle mesh or spline geometry, rendering approaches for high detail deformable materials and realistic fluids and vapors can add a lot of compute usage, then of course there's the rapidly growing physics compute requirements of realistic environments. Though I'd note that if we could track eye position accurately enough to only render at full-res for the fovea we'd need a lot less brute force for the render stage.
The problem is that these guys seem to be disconnected from the market they're serving. They're overwhelmed with technology and progress but can't seem the understand that the progress needs to be disseminated
to consumers or developers or it serves no purpose.
That and like you say the industry is still obsessed with achieving performance through raw brute force and their comes a point of negative returns on that. I know it's still tempting to take that route because it's proven and cheap, but it also takes the game industry nowhere fast.