The other side of the uncanny valley
The original image is titled the "CGI Effect Uncanny Valley", both in reference to the sharp dip over the last few years, and also as a nod to the real "uncanny valley" - the effect that makes robots or animated characters that are clearly not human acceptable to viewers, whereas those that appear almost real appear creepy.
I think most of us would agree with the graph: the entertainment value of CGI started to drop sharply just after it managed comprehensive realism. Both the Lord of the Rings and Matrix trilogies managed to achieve near-perfect realism in their diverse effects sequences, and their CGI was consistently pretty awesome (I'm ignoring all other aspects of the films).
Perhaps a lot of the entertainment value of '90s CGI was watching the progression of the technique as it expanded into new areas and pushed towards being 100% realistic; Terminator 2 was the first film to get a really good morphing effect, Jurassic Park had convincing animals, Monsters Inc had realistic fur, Lord of the Rings had crowd scenes, and so forth. As well as following the stories of the individual films, we were following the story of the technology.
So what now? CGI still struggles to do a really convincing human, as anyone who saw Beowulf will attest. CGI humans are fine so long as they're reasonably far away, but their faces don't yet convey emotion in the way real faces do. That can't be too far away - but you have to wonder why we as viewers should get hugely excited about it, given that we can see real faces anyway.
Surely the point of special effects is to show things that can't otherwise be filmed, and that's been the driving thrust behind all the big developments in stop-motion animation, blue-screen compositing and so forth. CGI now seems to be able to do everything these technologies did but better. The fight with the skeletons in Jason and the Argonauts (1963), a tour de force of stop-motion at the time, could presumably be done more convincingly in CGI, for half the effort.
And that seems to be the problem. CGI has pretty much done everything. The robots in Transformers had more components than previous CGI creatures, but that was the only novelty - unfortunately leaving viewers with no choice but to notice the plot. I think the only way CGI is going to be able to make the graph go up again is if someone actually comes up with something genuinely new for it to show.
Perhaps readers will have some ideas about what that might be. We reported on one possibly route back up the upward curve to the wow factor in April - steps towards a real-life Matrix involving running gaming graphics on a supercomputer.
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