What do you mean by "complete?" Arena's engine was not advanced at all, and one of the reasons Daggerfall is considered to be a superior game is because the engine.
The story is great and all but using Arena-like dungeons and really repetitive architecture? Come on...
daggerfall was far from a complete, finished product. many things didn't work quite as intended, some things didn't make the cut. perhaps many of these things could've been finished if the devs used an enhanced arena engine, rather than focusing as much time as they did with showing off the xngine. maybe they would've got around to adding the order of the lamp, or the different political situations (warfare, famine, disease, etc), or climate survival, to name a few things.
less work on debugging the core engine = more work on game content
i'm pretty sure the graphics could update accordingly, as well as adding more sophistication to the dungeon generation. same with skill leveling, character generation...these concepts weren't exclusive to the xngine, gamesas wanted to show off their futureshock engine.
anyways, this debate was meant to be light-hearted, and it was received very coldly. daggerfall without the xngine...