Torchlight isn't competition for D3. It has quite a different theme and both games target different audience. You should have read some interviews first. It looks cartony because that's how it should look. I'm sure they will return to the Diablo-ghotic-epic style in one of their future projects, but such a project won't be called Torchlight.
There is one revolutionary thing about Torchlight, though. After the single player is out they are going to make Torchlight MMO and that will be an action-RPG game. We know hundreds of mmorpgs around where battles are rather static compared to Diablo games. Now imagine a fast-paced dynamic fights settled in MMO world.