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Actually, the topic isn't about that...
Heroes has transitioned to 3D. Why do they look the way they do.
Nowadays, a lot of attention is paid to graphics in games. If before, a game captivated players with its deep internal content, now a lot of time and money is spent on external polish. Essentially, it's a transformation from an interactive book (with pictures) into an interactive movie. Warcraft 3 took this to a new level, which is why we now have these "in-engine" cutscenes, interludes, lots of video, and little text.
As for the "cartoonishness," it doesn't bother me personally. Are there any here who have seen a real, living elf or dragon...? We shouldn't even mention canons, because if someone doesn't know, even Professor J.R.R. Tolkien never said that his elves should have "pointed, long ears," and he got very angry when anyone depicted them that way.