I'm pretty sure that LFS does what basically no available sim has ever done: making driving if anything slightly too easy. That is quite a feat as anything from ISI and also the GTP mod for N2003* have at least got some tyre data from another planet, most likely connected to a physics engine with some dodgy aspects..
LFS also has its dodgy aspects, but at least it feeds fairly ok data into its engine. It is a long way off, imo, but I really respect it because at least Scawen seems to have found / used / thought up something that is closer to real tyres than just about any other thing we can drive. So for being so brave I respect it. I don't consider LFS to be very realistic, but I consider the 'rest' to be considerably worse.
The step that has still to be made in order for sims to get really really good is pretty large; if a company like iRacing really does pull it off, it can really leave the rest behind at considerable distance.
But I recall even N2003 wasn't as good as it could be. I remember when first racing it a tiny bit, Grant Reeve (papy dev at the time) said he was by far the fastest on road tracks but 'they' refused to alter the differential to something more realistic etc.. Even the most professional guys can and probably will make some wrong decisions.
Scawen deserves a lot of praise as he's been at it for so many years, showing no sign of giving up, and (slowly but surely) improves the realism. You can't say that for most 'small dev teams' (Nkpro, Drivers Republic for example..)
*I don't know about N2003 nascars, didn't really drive em..