Realistic graphics can only be used in a limited way, mostly with backgrounds, or textures (like in 7th lava fall). Of the two approaches, I think textures are the better one.

The problem with photographs is that they do not tile well, and they do not convert well to 256 colours. They also take up a lot of tileset space. Realistic textures can at least avoid these problems, as long as you don't go overboard.

The reason what snooze did looks good is because he used multiple layers. Instead of taking a flat picture, he cut out parts of it in order to give it a bit of depth. This approach is good, but it still has the problem of limited colour (which prevents it from ever looking realistic, and can also make it visually bland), and tiling (it's pretty obvious where the image has been flipped). Overall, while I appreciate the novelty, I think a hand drawn background would still look better.

If JJ2 allowed for 24-bit colour tilesets, this would be very different of course.