These type of games are very labor intensive, and it's been my experience that unless there's some kind of financial reward for all that hard work, people tend to lose interest very quickly. It's difficult to keep a team motivated for such a long period of time, especially for any projects that fall under the "hobby" category. Who's going to work 10-12 hours a day for a year, unless it's your job? This being said, I'm confident that there's a future for adventure games. Unlike the hardcore gamers, the casual crowd isn't allergic to puzzle based entertainment. Who could have imagined that titles like "Brain Age" or "Professor Layton" would have had so much success? Adventure games are such a natural fit for handheld devices. It's the perfect way to kill time during long commute.
As for graphics, I believe they're as important as story and puzzles. We're a visual oriented culture, and unless you have high production value people just won't care. I'm not necessarily talking "Crysis" ultra-realistic graphics, but visuals that fit well with the subject matter of your game. Day of Tentacle beautifully stylized backgrounds still impress me more than most games i see on the shelves nowadays, including Crysis.