i agree with nix here:
1) Use it sparingly. Lots of movies do CGI for the sake of it, when an in camera effect would look better.
2) Keep your CGI from looking like CGI. Minority report is a pretty good example with the exception of the greenhouse scene.
Like any other TOOL in fimmaking, it's meant to enhance the storytelling (the first Matrix), not for spectical (The Matrix Reloaded).
perhaps the root of this thread is the rise of technology in cinema? if so, the fear might come from the perception that there is a trend to make movies where the technology is the focus rather than more traditional stuff such as plot, characters, acting. i agree that the existence of such a trend would be disheartening but would assert that the system has a way of working itself out.
case in point: the reviews for the new MATRIX films are not good.
i like to think that audiences are generally smart enough to recognize good film-making and to separate vapid CGI spectacles from the stuff of substance. without this assumption, the film-making process becomes a bit self defeating. you have to trust your audience to make up their own mind regarding what is good and what is disposable.
this discussion gets emotional when film-makers and film-lovers come to terms with the frequent disparity between critical acclaim and box office receipts. despite the shitty reviews that MATRIX RELOADED received, it still made a ton at the box office. some would say a good portion of this revenue was *because* of the use of technology. i agree that the disparity between critical acclaim and a good box office is worthy of discussion, but it's nothing new.
good story tellers know technology is only a means to an end, not an end in itself.