I was about to write a post about how Daytona USA was not the first "using a racing game to show off state of the art graphics" game but probably the first one with in depth drifting mechanics. I was also going to talk about how Ridge Racer 7 was one of the, if not the last one to do the "state of the art graphics + crazy arcade drifting" thing, at least for major releases.
But then I realized that Ridge Racer 3D (2011, 3DS) exists. I need to play that.
I don't know if Wipeout fits in this calculus or not. The early games do for sure, in terms of "arcade racer with deep mechanics", but HD was, to my understanding, largely a remake of the PSP games and Omega was a re-remake of those + the Vita game.
Unless I'm forgetting something major, those really were the end of the line. Since then it's all been about sim (, wheel required) or simcade (, ala Forza), or just generally trying to follow in the footsteps of Gran Turismo. I don't much care for any of the "all your favorite licensed cars are here" games, though I'll admit part of that is being put off by the very basic/somewhat boring mechanics of the early 00s era NFS games. But anything with real cars gets categorized in a different class for me.