People get too hung up on CGI vs practical. Practical does not guarantee a good effect just as CGI is not necessarily bad. Some of the best effects I’ve seen have been CGI and some of those are in TPM itself. But each approach you might take to an effect has different limitations and not respecting those limitations is what causes an effect to look bad.
One thing to recognize is that interaction between CGI and the real world is very difficult. Another is that surfaces and lighting good enough to fool the eye is also incredibly difficult. Especially organics are hard no matter if you try and fake it with silicon, rubber and wax or with computers. Max Rebo and CG Yoda are equally bad in my view because neither of them convinces you that there is a real character on the screen. And filling the screen with so many full CG characters like Jar Jar draws a lot of attention to the fact that a big part of what you’re seeing is fake. They do not and for the most part cannot integrate with the shot in a convincing way. A movie like Jurassic Park overcame this limitation by also having animatronics to fill the gaps left by the CGI.
The other thing is that integration of foreground and background is difficult even if those elements are a set and a miniature. Poor compositing plagues optical approaches just as much as it does digital. Matte paintings can look fake just as well as CG backgrounds can. Think of OUT cloud city. The overuse of blue screen backgrounds is the real culprit. When nearly every single shot breaks down because of a combination of poorly integrated backgrounds and poorly integrated characters the illusion is quickly broken. Even if the set is itself not bad.
A slip up here and there in the OT is more innocuous because the elements that are front and center to your attention works much better. Yoda convinces, and so does the Dagobah set and mattes. The reality of the Falcon set and the hallways of cloud city diverts you from the fakery of the backgrounds. The illusion is completed because key characters like Chewie and C-3p0 work, where characters like CG Yoda and CG Jar Jar do not.
And at the end of the day while CGI has the potential to look like it does in JP, Zilla 98, TPM etc. It doesn’t for the most part. And especially not in II and III, where the low effort put into the CG elements stands out like a sore thumb and taints the entire image even if there are decent practical effects in it.
