Wait... I thought George Lucas WAS CGI too.
Good CGI is fine. Obviously, otherwise it wouldn't be good CGI. Models / Puppetry uncomplemented by CGI are no longer viable, but I agree that mixing traditional with digital special effects tech would make up for shortcomings where applicable. It's just a shame that the biggest 'shortcoming' is ultimately going to be cost. Impressive or not, puppetry and model-making were never cheap. I know you specifically address Movies, and though we're quick to scoff at 'bad CGI' on TV, when it rears its ugly head, it has usually allowed for a higher quality program overall, allowing TV to tread ground it otherwise would have had an even harder time convincing us of.
CGI doesn't annoy me in live-action, but I'm getting sick of it in animation. The UN should decree that only Pixar are allowed to make computer generated animation, since they're the only ones who can achieve anything interesting without buzz-words, BOLD ITALIC UNDERLINE! kiddy pleasing, or tired pop-culture references and innuendo. Odd then that the 'CGI' itself in these movies - sloppy and unappealing as it usually is - is mostly less objectional than the cliched baggage that comes with it. 'CGI Animation' seems to have become a faddish genre instead of a pioneering mode of film making.
But that's probably a digression from the point of the thread which is, uhh, there's a LOT more wrong with the Star Wars prequels than CGI proliferation. They're just genuinely bad movies that become the scapegoats for film-making progress. Or something.