If I may...
I think there's really no question here that LFS' graphics aren't the best. Even back a few years, it was pretty easy to get well over a hundred FPS in this game. So, I'd say LFS could definitely use a graphics update.
However, keep the following in mind:
First, even if running LFS is a piece of cake job for computers that are in any sort of way recent (keep in mind: recent in the computing world), I wouldn't say LFS graphics are annoying to look at. Sure there is tons of improvements that could be made, but if I'm driving past a quite boxy tree, my reflex isn't to ponder about the ugliness of that tree until I pass it again on the next lap. I just go along accepting the graphics the way they are. I'm confident I'm not alone to feel like this.
Second, and this has been said time and time again, the amount of work involved in a graphical overhaul for LFS would be not only immense, but would be a major obstacle in keeping Scawen focused as much as he can be on his current projects. The problem is that for LFS to be majorly improved in terms of graphics, a new engine would probably be required, and Scawen would need to code that (somehow I don't have the feeling he'd get it from somewhere else). People have been improving the textures for years, and while the results are far greater than what we had in 2003, it's simply impossible to bridge certain technological gaps with only texture work. Technologies have evolved, and you will simply not get the same result in a 2000 era directx9 graphics engine as you will in a 2010 era directx11 one.
Finally, another hurdle in the way of a graphics overhaul would be the amount of work involved for Eric, which I guess would also be immense, and we know that would take a long time.