We already achieved photorealistic rendering a decade ago, and we can do it in real time now. Graphics aren't going to get much better any more. This is why 1) a wider variety of art styles has become popular, and 2) people clamor about VR being the "next step".
No, we literally have photorealistic rendering. It might not look real at all times but the math is true to the real world physics. That's literally what physically based rendering is.
The limitations in real time rendering are hardware limitations now, not software. But for regular applications, PBR literally simulates individual photons. It doesn't have a ways to go. It is already true to life and physically accurate.
But of course, even the best tools in the world can be misused by a bad artist.
Difference is we can all tell there's a difference in graphics and can laugh about it. In 40 years who knows. Graphics already look so good now there's only so much further they can go
I think "full-dive" VR (think the matrix or ready player one) in 40 years might be possible with the right breakthroughs in neuroscience. I hope I live to see the day, that tech will change the way we live big time...