I agree that the original version feels like a western setting. In fact the different area of Tatooine in the movie feel like a real place with not much of a spectacle, it’s my fave location. When you see the town after Luke sells the speeder it feels like there’s a maze of eerie streets and alleys just out of view, not a bunch of flashy big buildings. The new one is like generic sci-fi stuff with extra towers and domes everywhere. Like any boring city they visit in the animated shows, they usually look like that. Plus the 90s CGI textures look like crap. Like something out of any generic blockbuster of that time.
Matte paintings and even models would have been more fitting than those 90’s CGI shots. They actually looks like a tv episode of any generic sci-fi show from the 90’s too. I’m with you, they look flat and fake looking, and likely cost considerably more that a talented matte painter or model maker would have?
Kenobi’s hut in real life:
^ 1977/1997 scene comparison
from https://wanderdisney.com/item/unnamed-structure-ben-kenobis-home/