David Hockney argues that painting is more realistic than photography, because it gives an insight into the context of a scene. And some of the great photos of the last century- notably the flag raisings on Iwo Jima and the Reichstag- have been staged.
Oddly enough, we’ve just started the Modern Art phase of critical studies on my course and I was reading all about how Picasso reckoned Cubism was more realistic than plain figurative (or Illusionist) art because it gave a more complete view of the subject and the artist’s attitudes toward it.