I think (having played most racing "sims") this game is as good as a "sim".
Instead of almost perfect physics and disgusting graphics you get almost perfect graphics with awesome physics.
see my point ?
A funny thing that always strikes me about the iRacing/xFactor snobcrowd is how easily they downplay graphics. Spot-on physics are very important, and I'm sure we all agree to that, but when you're simulating reality, visual fidelity isn't exactly a marginal factor.
A sim can simulate even the effect of specks of dirt on my bodywork, but if my eyes bleed while playing it, I'm not going to feel much immersion, to be honest.
Personally I find GT5 the perfect balance between simulated physics and visual fidelity, and that helps my immersion much more than sims too unbalanced in that area.