For me, I wouldn't go so far as to say that HS graphics are can be superior or even really on par with DAZ graphics. There are bad examples of both around here, but with a little effort, Daz renders far surpass the capability of HS-based graphics in terms of realism, natural character expressions, lighting definitely, shadows, and environments. Look at Halfway House or AOA Academy for the best examples of smaller games. Of course, games like CoBD, blow everything else out of the water in terms of graphical quality. Yes, there are some uncanny valley renders I've seen, even in the best games, but some of the renders I've seen I have to blink a few times to be sure I am not looking at a photograph.
I think the biggest limitation are the character models and skin detail. Also, HS Studio is still limited by the asian-model based engine of the HS Studio. You can extend it quite a lot with mods to make more western style characters, but it is not really possible to get the kind of amazing diversity of characters you can get with Daz. Take a look at the hundreds and hundreds of unique, distinctive, and quite beautiful models on Daz store, and you won't find anything like this if you look at HS cards on the many sites that have them.
As an example, look at the very beautiful and unique Daz models of
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,
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, or
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(below) for example.
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There is no way to make anything compatible in HS. Even if you get the face shape and features sort of close, you will never see the skin detail, the eye reflections, texture on the lips, detailed teeth, or natural facial expressions. etc.
Most HS games have quite limited graphics and use the default animations and terrible looking MCs. Pale Carnations does the best with the limitations of the engine, and I haven't seen a better example of HS graphics done well, as with this game. Some others such as Once in a Lifetime also do such a good job that I tend to forget that the graphics are not rendered, when I am focusing on the story.
Not everyone has a super-powered rendering machine, or the ability to spend hundreds of hours and lots of money on electricity to keep a rendering PC running full-out to make detailed renders. I am amazed with games like Pale Carnations, just how good they have been able to make the graphics with HS, and I want to specifically give credit to the devs for going way past the limitations of the HS Studio engine with mods, that really bump up the realism of the characters.
Also, if the story and characters are good enough, I can mostly forget about even sub-par graphics. There are quite a few Daz games here that have pretty basic graphics that are nowhere near the quality that is possible, usually because of lack of sophistication in lighting techniques and using old generation models, that I still enjoy a lot due to the storytelling and dialog, and there are even one or two Kokatsu based games here, which can never have realistic looking graphics because of the engine, that are fun to play.