The fact is that even Special Effects experts agree that models work better, but making decent models and finding decent physical modellers is more expensive than CG stuff. George Lucas, however, gets carried away, with all his nice shiny spaceships and luminous aliens. Take a look at Tatooine in Ep1 and in Ep4, I much prefer the Ep4 one, which really looks like a dump, even the Falcon, with it's burn marks and dirt stains, has 1000x more character than the ridiculously fake ships in the new movies. Jim Henson and the muppet workshop dd a better job at the aliens as well, why? Because they were real objects interacting with a real environment, and we still lack the technology to produce that seamlessly on a computer.
If a CG alien picks up a drink, the you either need to layer the image over a real person picking up the drink, which always makes the drink sit wrongly in the CG's hand, or you can animate the drink as well, which then leaves you to worry about the drinks interaction with the table it's on, i.e. refraction of light, shadow etc, which never looks quite 'right'. You can see how this leads to a chain where everything is suddenly computer animated, and the human eye is more susceptible to the small 'errors of reality' when you are trying to trick it than an obvious man in a rubber suit. It's strange, but true.
