Just something to point out.. we want the game to be on one disk, right? It's not ALL about what the engine can process in terms of poly count and texture resolution, you also have to keep in mind - high res textures take up space. And considering in a world this huge with so many different environment assets, characters, creatures, weapons, and armor they've probably not got that much room to spare.
Also, don't feel like replying to individual posts but I'm raging about how many people clearly have no idea what a game engine does. Like, if you're not going to look into it and have no clue what you're talking about, why do you even talk about the engine at all? Hell, why do you even know the names of these engines? It baffles me.
RAM is a
far more limiting factor than storage space for the game itself. The PS3 has 256MB of graphics RAM with 256MB of other RAM. The Xbox 360 has 512MB of shared memory. That and the processing capabilities of those systems is a far more limiting factor. Also consider that people without top of the line cards need to be able to run the game too on the PC.
As to the latter part of your post, I agree 100%. It's a meme I think. People that have no clue whatsoever see that the engine has a name, and so they find a reason to be upset or angry about some mythical connection to the old engine to the new engine, even though they have little to no understanding about any significance to the engine. In fact some are so out of touch with reality that they in fact think an engine must be totally rewritten to ever use more powerful hardware, as if it's some physical component. It's not totally their fault really, considering game companies do market engines sometimes and of course marketing is meant to excite people. See the Cell processor and the cult-like devotion in fans Sony has built up around it for another example.