I can easily think of a reason to upgrade the graphics: sheer enjoyment of the eye candy. Is it necessary? Nope, not really; but as a previous poster said this isn't a binary decision. You can have both in the same game, and wanting lots of nice eye candy doesn't make you any less of a 'serious' strategy gamer than anyone else.
(Although I contend that 'serious' and 'game', when combined, constitute an oxymoron.)
I've played GalCiv for a few days now and, although I like the game, it does feel like I've travelled back in time to the days of MOO1 in terms of the graphics. This matters to some and not to others, but I doubt anyone can deny that a big injection of eye candy doesn't appeal. In fact, it just might be what lures a certain subset of the RTS fans into the strategy genre. "MMMMM...pretty!" and like Gollum putting on the One Ring, they're hooked before they know what's happening.
Eye candy is good, whether you find it necessary or not. Eye candy doesn't *detract*, it can only *enhance*. Asserting anything else is just plain silly.
There's no reason we can't have GalCiv *and* eye candy, other than the devs just don't have the time and resources to provide it. Although clearly they have the talent, as can be seen in all the cool little movies.
Max