One thing that someone mentioned is very true: yes, in the end, the effects weren't entirely photorealistic and convincing (anytime a horse was on screen, for instance), and the eyes were "dead" (although much better than they were just a few years ago in CG animation), but...

...how "alive" were they eyes and photorealistic the characters in "The Incredibles"?  Or "The Lion King"?
The problem is that CGI is a new artform and all the tropes of the genre, the willing suspensions of disbelief required to accept the conventions, hasn't settled in it.  A perfect analogy is to consider anime and manga and it breaking into the North American market.  It's huge these days but for the longest time people raised on traditional North American animation and comic books couldn't get their heads around the style choices: the big eyes, the sweatdrops, the exaggerated expressions and caricatures when expressing emotion, so on and so forth.

With the two movies I mentioned, one was (mostly) traditionally animated, the other, stylistically, looked kinda sorta like traditional animation.  As such people overlooked the non-photorealism.  No one expects the eyes to look lifelike.