Yeah, smoothing out motion is probably the next big leap, but what we have today is far superior to anything that's come before. Here's the first non 8-bit animated video game I remember and what we have today is, of course, leaps and bounds beyond this.
I suppose that might suffice for some people but not for others. There will always be sick fucks who need to see real children being tortured and raped. A big supposition but what if the animated modeling you suggest drives more pedos to require real life interaction and satisfaction?
I was in a meeting the other day with one of the attorneys who is handling this case. He didn't share anything that wasn't public knowledge though. And no, they weren't deposing me.