VFX or visual effects are not just used in live action movies but also in animated ones to. In recent years Visual effects have become much more prominent in movies with the development of hyper realism. So live action film makers have become reliant on the effects to make there movies look bigger, flashier and better. But this means that character and plot development is sacrificed to make the pretty picture. Peter Jackson the creator of the Hobbit movies has stated in interviews that a lot of directors and producers rely heavily on VFX to make things in movies possible. Its not a case of thinking of the most suitable way to do it but they think of it as the most impressive way to do it. However this doesn't mean that Visual Effects studios are staying in business oscar winners Rhythm and Hues went bankrupt around the time they won their oscar. So there is a danger of the visual effects industry vanishing because they don't get paid any of the royalties from the movie that could keep them in business.
Also when CG and VFX were first introduced there were severe limitations that kept the technology back but this was something that was beneficial to it as it meant directors had to think outside the box and use VFX as a side element that complimented the film rather than made it. Now all limitations are off and there are multiple possibilities for further hyperrealistic animation used for CG and VFX putting story driven content on the back burner. My own personal example of this reliance on CG and VFX is the upcoming Mummy movie the original movies had VFXs for the impossible mummy (you could see through its body at certain points)and natural disasters because these things were out of their control. they used special effects made by actual explosions and the elaborate scenes actually happened with them not acting to a green screen. With the latest movie the flashiness follows the same formula of all other big super hero movies or dick flicks as a class mate calls them. So the limitations over all for VFX and CG comes down to producers and directors and how they interact and view the usage of the technology before them, do they use it sparingly and smartly or throw it into the whole thing like Spielberg and his 45 minutes of CGI in crystal skull?
https://www.rocketstock.com/blog/opinion-10-reasons-why-cgi-is-getting-worse-not-better/
http://freethoughtblogs.com/singham/2013/02/28/visual-special-effects-industry-in-trouble/
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