I think my golden middle is sprite + pixel.
I play a lot of CG-games, but I really like the creative ways you can display scenes in pixel. that being said, pixel has limitations. Like a characters new outfit not being a visually impressive, esp. on subtle differences. sprites help complement that part. the same goes for very subtle sexual things. Pixel art works very well for the basics and the BIG changes, but to show subtle differences I think sprites are a great addition.
I agree with you that once CG is introduced tho, there is a clear separation. Each CG-scene is basically its own little world. It's like watching a presentation and then being asked by the prof to watch this youtube video or fill out this test. It has a level of separation and has to be able to exist on it's own, aside from the game. Sprites bridge that gap. They are visually more enhanced and removed from the actual (RPGM-)environment but they still can exist in conjunction with pixel-art. They don't completely remove you from the (engine) framework and map.
Pixel art also has many advantages from a dev standpoint. It's cheaper, and thus allows for far more variety in graphics. The deadline are also far shorter, ~1 week for several custom animations while a CG could take 3 times that amount, and even worse if you want it semi-animated. If I were to transition from pixel art from CG, forget about semi-monthly deadlines. Also, forget about having several scenes with different positions per update. At most, you're getting one CG per scene with a few variations.
What's worse, you become extremely reliant on one artist and on their own circumstances, whether they're sick, busy, etc... or you go for another artist with another artstyle and forsake consitency, which is usually not very well received.
With pixel art, I've had artists disappearing for weeks, but since it's small and low-details, I can easily ask another artist and nobody would notice the difference. Same for busy periods, where I can just ask a few new artists to do some extras here and there. As a dev, this is a huge load off my back.
Of course, if you're your own artist, things are different, but all I can draw are vaguely human-looking stick figures.