I think the ride is such a hit because people love AAs. I think people can tell when there is a cheap cop out with screens. It requires way more skill to come up with and keep up an AA. With a screen you just animate something (sometimes not even close to photorealism), put on the screen and you're done, and people notice that that's a lazy way to do something. There is a very famous comment Walt Disney made when an imagineer was a bit sick of Disney's obsession with details. In a coach car he requested a specific part made to make the coach car authentic. The Imagineer retorted "no one will notice, no one will care", then Disney answered "if a guest notices that small detail and that we aimed to true authenticity with the details, then the guest will know that we thought he was important and special enough for us to try our very best". I do think people can tell. Universal Studios Hollywood earned "the screen capital of the world" for a reason. Guests like something they can't get at home. Some TVs have better resolution and are big enough for people to say "so, why am I paying if I can do this at home for free, or pay $10 dlls and go to the movie theater". I think that's why Hagrid has been a home run. People saw that Universal dropped screens and projections entirely and they came up with a revolutionary ride system. Guests are reacting to that. The AAs means Universal listened to the comments. My two cents
By the way I do think some rides with screens are spectacular, but it's a hit or miss with those rides. Hard to execute