Not quite. If you use motion capture in something along the lines of Toy Story, I think it is definitely the wrong way to use the tool. But if you use it for special effects work, which is where it is used most often, thats a different issue. Effects are intended to emulate and exaggerate reality, seamlessly, whereas Pixar are telling an imaginary tale in a fantastic world.
In the Matrix and Spiderman they hand animated, and I thought that was the wrong way to do it - they should’ve used motion capture, because that’s the right tool for the job, to be able to make us believe the fantastic was real. Whereas Pixar isn’t trying anything of the sort, they’re saying this is a tale of talking toys, it isn’t real, no need to try to make it look real, it’s stylised from head to toe.
The same with rotoscoping - you can use it for effects work where you are creating occlusion masks for compositing, but you shouldn’t use it to tell an animated tale.
Animation should play to its strengths, i.e. do what can’t be told in live action: Exaggerated expression, fantastical settings and characters, over-the-top violent slapstick, etc.
If all you’re doing is emulating live action completely, then do it in live action!
This is why I don’t like cartoons like King of the Hill, but really love things like Futurama. One utilises the tools of animation to great effect, and the other is just a sitcom that happens to be drawn for no good reason.
I’ve only seen clips of Waking Life, but what I saw didn’t seem to me to warrant the weird rotoscopy colourisation. Maybe there was a good reason for it in the story somewhere that I’m unaware of.
This is, of course, all my opinion. There isn’t really a right or wrong way.