Still images are usually higher quality and more interesting than animation loops imo. Usually, animation loops are pretty basic. When animations are good, they're really good though. There's also the instances where the developer puts their all into choreographing scenes in such a way that it turns into a cinematic experience (Inanna Revenge is pretty good in that respect).
With well made games I rarely notice a lack of animations, but they can add to the story if they are well done and not just randomly thrown together with some weird pacing.
The problem is that most of the time the animation doesn't look great, a 3 second loop is no different than just using a picture, except that it might look worse