I don't see anything wrong with the CG in the prequels. Most of the stuff they pulled off was in daytime lighting, which is much harder to do than quick glimpses of a dark T-Rex on a dark rainy night.

Yet it all looked absolutely real.

So may people act like Lucas would use CG first and consider other options later, but Lucas was all about doing it practically if he could help it. Take the Niemodians for example. They even made a costume for Jar-Jar with the idea that they could get some practical shots out of the deal. And the CG artists had to prove to George they could pull Yoda off before he would let them.

I think Lucas is the first person to tell you that doing it practically is ideal. But then again you just can't pull something off like Sebulba with a rod puppet.