Horror films, at their core, probably garner the least amount of respect from the intuitive film goer. It's not hard to see why, as most films are designed to be windows of escapism, where the viewer allows them self to get lost in the twists of the story and emotional journey of the characters, where horrors try to accomplish the opposite; filling you with fear and dread, jumping at loud noises, making it impossible to actually settle down during the film.
One of the greatest advantages of using visual effects is it's ability to aid in the viewers absorption into the plot with photo realistic renderings of environments, taking us from the dizzy heights of Pandora to the drizzly streets of pre war London. However a wildly shared opinion throughout fans of the horror genre is that practical effects beat visual effects hands down and CGI often hinders rather than helps scary films.
Horror films are mostly set in plausible environments, to allow you, as the viewer, to imagine yourself in the same situation and emulate the characters fear yourself. The problem with VFX in horror films is that they're used to make creatures, whether that be a vampire or underground sewer monster thing, and despite all best efforts, the creatures never truly sit into a real environment.
Avatar worked because CGI creatures ran around a CGI environment and Avengers worked because they have the budget to make it work, but unless the quality of the visual effects is ILM or WETA levels of outstanding, which is often isn't with horror films, the monsters don't integrate well enough. These films don't make as much at the box office so they're not given the kind of budget to afford those effects.
That's not to say computer generated effects don't belong in horror films, it's just means they need to be used properly. A recent prequel to John Carpenter's classic film The Thing, also called The Thing , showed us the incorrect way. The original Thing managed to create an atmosphere of claustrophobia and tension, with moments of true fear piercing through when the Thing would attack, the gruesome models splitting open and dismembering and assimilating the crew, screaming and spitting goo all over them. In the remake though, it was hard to shake the feeling that the actors were looking at nothing, that the creature moved too swiftly, that it was all too artificial. The actors can't effectively fight something that isn't there, creating a disconnect between them and the creature, and in turn between the film and the audience. I experienced a similar feeling while watching I Am Legend, but that may just have been because the effects were so truly terrible.
In my experience it's often the smaller films, forced to count the cheddar at every opportunity, that pull off the use of CGI. Troll Hunter is a fantastic example, although not of a typical horror film, but of how a modest budget used effectively can still create a credible threat. It's also a fantastic film which is now being remade in English for an America audience, which will suck.
Perhaps Splice is a better example of great effects for a small cost. Starring everyone's favourite nose, Adrian Brody, Splice is the story of two scientists who are told not to do something but do it anyway, and it end up making a bit of a mess with a human/animal hybrid, Dren, that they then decide to raise instead of kill. Dren is visually stunning throughout the film, a believable and beautiful creature that evolves through various forms throughout the narrative yet still maintains quite a distinct personality. Dren is not a true CGI creation, more an adaptation of the actress that plays her, meaning she is almost always believable on screen, this sparing approach allows the effects to focus on total adaptation and intergeneration, resulting in a realistic antagonist that is both fascinating and fearful to the viewer.
Grabbers has a similar approach, focusing on 'less is more' until the end of the story where the inevitable showdown occur. A small budget Irish film that doesn't take itself too seriously, allowing a fun story with believable effects to develop despite being based around a slobbering tentacle monster. But the monster looks real throughout the entirely of the film, begging the question of how small budget horror films can outshine their large budget counterparts in terms of impressive visuals.
So is the view commonly held by horror fans correct, that there is no place for computer effects in frightening films, or is more the case that larger budget films that are wildly distributed are simply letting the side down, and that there are perfect examples of successful and entertaining visual effect horrors in the world, they just weren't given a chance at the cinema?
The truth is that advancement in visual effects have allowed films that wouldn't have been able to exist ten years ago, like Grabbers and Sharknado to be realised and distributes and grow a loyal fan base. And if we have to allow remakes of The Thing to be made so that smaller, cheaper post houses can learn from them and go on to create Troll Hunters, then so be it!