>>1007943
>you have to have 100x the density of geometry
That's how Silent Hill and all other PSX games did it. Triangles are very light on memory compared to hi-res textures.
They can also be easily culled in chunks.
See pic rel, that's Silent Hill

>you're forced to make sure they're all scaled and positioned correctly, you have to then unwrap those thousands and thousands of faces
Select all similar quads thanks to Blender's agile selection tools, press U to open the unwrap menu, select Reset, then in the UV menu press S to scale and hit forward slash followed by [number] (because your tileset is [number] times smaller than the size of the full image), and drag them all to their tile easily thanks to snapping. It's very easy.
>and after all that you end up with graphics that belong on a gamecube
You can still give them normal maps no problem using the same method: the normal map will be a tileset too. PBR materials can still be accomplished.

Your method is for rendering, because you do all the materials you need then forget about them.
Videogame developers need to deal with the materials in their engine of choice: they'll clutter up the place, and often times make life very difficult since engines will usually want to modify them into their own versions of the materials.

Games that did this method could run on 2 MB RAM.
Games today that do your method can't run on 16 gigs of RAM