Maybe people are calling games photorealistic because they ARE photorealistic. Oh sure, you might noticed differences, but I doubt any random person you ask on the street about pictures from Unreal Engine 3 or some STALKER shots will even know it's not a photograph unless you tell them. Hell, my parents thought that picture of an Unreal Engine 3 character was a guy in a rubber suit
And parts of Doom 3's environments look fairly photorealistic, if you stand a long ways away from the screen and don't notice the extremely ridged shadows, heh.
And yes, a lot of upcoming racing games do actually have VERY near-photorealistic graphics. Hell, even the original Ralisport Challenge had some parts that looked fairly convincing, and that game is several years old. Here's a test: print out a picture that someone says looks "photorealistic", and then show it to a friend or family member and ask them what it is. See if they even notice that it's not a real photo, if they don't say anything about it being fake then chances are that would be photorealistic