The DA:O engine proved that rather low polygon counts can still be used to generate good looking graphics.
I would like it if the TES V engine would take the less is more approach.
I remember watching a vidoc about Oblivion, and I though it was kinda stupid how the developers were happy with how many characters (and monsters) they could have on screen at once in the battle outside Bruma... it was pathetic... that is no battle.
Imagine if, in TES V, you could be in the middle of a battle with hundreds or thousands of combatants...
Using polygon counts, texturing, lighting, and shading in efficient (and non extravagant manners) would allow the TES V engine to support many more characters on screen at once. This would allow a larger, more grand environments, more objects, higher LOD's, and bigger battles.
It would also keep the engine running on current generation consoles in a decent manner, and allow aging comps to keep up.