Games do exist that are deliberately done in PS1-style graphics, and I've seen them, but ... I can't think of any examples.

On the Livejournal version of this post, zarla mentioned Power Drill Massacre, which apparently mimics PS1 visuals! Having looked it up: it looks absolutely horrifying and I'm definitely not planning to play it. I suppose it makes sense that horror games are still being made in that style; there's definitely something unsettling about it.