it's easy to criticize the shadows, but there were other things that wouldn't be possible if the shadows looked like they did in prologue and the GT HD Concept game...
it was one of those difficult choices of what to nerf and what not to..
now, is suspect that the tesselation thingy they got in GT6 allows for the processors to work harder on displaying gooder shadows, whereas before it was working on smoothing out the cars' shapes.
Totally unrelated, I forge maps on Halo 4 and that forge system has numerous limitations. Often times, people will ask "why didn't you do this or that?" and the answer is often, "well if I did that I'd have to remove this, and making this thing not suck would make this other thing suck". That gives me some perspective about what PD had to deal w/ while programming and optimizing GT5.
It's not really that they got lazy and forgot to finish the shadow tech, but more that they made a sacrifice for something that overall doesn't matter too much, for something that matters more. And, in photo mode the shadows were always much better anyways, so screenshots of the game usually didn't call attention to any pixelation.