They were eShop exclusives at first and only got physical releases later. They have cut down graphics for storage space reasons not technical ones.
What is your source for this? I have never heard about this before. I searched a little, but found nothing about this. The only thing I found was that in Japan, Bravely Default had five different demos released on the eShop before the original version of the full game was released, while Bravely Second had both a trial version and a demo available on the Japanese eShop before the full release of the game.
I read the discussion about Sun/Moon and their story on the last few pages, and I feel that it does a good job at showing why I think S/M are overrated and average games, as well as showcasing the issues with their story. I don't really want to join the discussion, but I need to get some things out of my head, so I'll share some of my own short thoughts on the subjects.
When I play Pokémon (or any other video game), it is for the
gameplay, not the story. In Pokémon, story is not even among the five most important things for me, while in other games, it can be the second most important thing at best. Gameplay always comes first for me. If we look at S/M, it is clear that they had a very big focus on the story, not so much on gameplay. Which is very unfortunate, because I think S/M has some pretty big and notable gameplay issues. The biggest one for me has always been the lack of good training spots, which I consider a huge negative for any game where it is the case (it has always been the main reason HG/SS are my least favorites). I like the story in S/M, and I think it is the third best in the series, but since I consider gameplay more imporant, the story is not enough to make up for the gameplay issues. In comparison, I think B/W and ScaVio did a much better job with balancing gameplay and story, plus I prefer both of their stories over the one in S/M. We can also compare S/M to X/Y, which in many ways are the polar opposites of S/M as they had a mediocre story but excellent gameplay. Since I value gameplay higher than story, I think X/Y are the superior games here, they are even my third favorites in the series while S/M are somewhere in the middle for me.
Regarding the story in S/M, one thing that was brought up is that Lillie is the main character, not the player. I consider this an issue, since when I play a game, I want my player character to be the main character (or at least one of the main characters), I don't want an NPC to be the main character. Lillie being the main character would have been fine if it had been another form of media like a book, a movie, tv show or such, but for a game, I need the player to be the main character. Since that isn't the case in S/M, I feel that it hurts the story, especially compared to ScaVio and B/W where the player's role is much more vital and can't be removed.
I don't think S/M are among the most polished games in the series, especially not since US/UM added a lot more things and fixed/improved upon several of their issues. I think the most polished games in the series are Platinum, B/W, B2/W2, OR/AS and US/UM.