If a game costs 20 million in production and 17mio+ went out for Visuals, then the game will most likely suck as there wasn't enough left to hire competent story writters, AI programmers etc.
A lot of the development budget is blown on needless stuff. For example, developers who take trips to exotic places for reference photos (A free trip to Japan? Let me get my camera!), ridiculous PR schemes (let's rent a hot air balloon with the game logo on it, hire a bunch of female models to thrust out their chests and stroll around with fake guns, and invite a bunch of journalists along!), company theme tunes ("Infogrames Rocks My World", anyone?),"funny" in-house videos, unproductive overtime, etc.
It's also amazing how much money is wasted on stuff like physical models of game characters or replica weapons/costumes that all end up gathering dust on some dev's desk or in a neglected office corner. Also, it hardly costs much to hire a decent writer (the problem is that anyone who knows their way around a keyboard and has thought up a "good idea" thinks that they can write). As for gameplay, well, I don't think that there is a direct cause-and-effect relationship between "monetary investment" and "fun".