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It’s not about what they can afford. They could afford to change it, but they prefer to keep the same style they’ve been using.
Whether it looks stupid is your subjective opinion.
The funny thing is that they’ve actually improved the graphics of the game a lot over the years. Not just things like water animation, but in improving the resolution of bitmaps for characters, landscapes, etc. they’ve even totally overhauled the graphics for some races (e.g. gnomes, which for a while in beta led to nightmarish animations of their eyes bulging through their eyelids when they blinked).
But to your point: yes, they’ve deliberately left the characters having a goofy, disproportionate cartoonist feel. Because it’s such an integral signature of the game, always has been, and always will be.