I have heard it being explained as invention of photography necessitated a different approach to art. As realism was no longer only possible through an artist they had to go in a different direction. Impressionism, which can perhaps be regarded as the first major artistic movement that tried to move away from realism, also began around the invention of camera.
Why can't that "different approach" be simply painting (realistically) things that don't exist?
For example:
Pictures of something that existed in the past, but was destroyed. Or someone who died. Or a younger portrait of someone.
Pictures that differ from reality, such as putting together two famous buildings that actually exist in different cities, near-equator stuff covered by snow, scenes containing objects with incorrect size... Or impossible structures, like Escher did, only more realistically.
Science fiction, fantasy, fairy tales...
Painting a "realistic" dragon requires skills, and cannot be replaced by photography. Why don't modern artists show their skills at this?