In the DirectX 11 Ultra Upgrade PDF Tiago Sousa says:

Crysis 1 had a limited amount of textures, as scenes were composed mostly with vegetation, rocks and terrain. Crysis 2 features so many more textures than Crysis 1 that it would have required several DVDs to store them.
Thus, we now release a higher resolution textures upgrade as a free DLC, which features 2x increased resolution and this actually means 4x extra memory requirement. Thus a minimum of 1 GB memory for the graphics card and a 64-bit operating system is required. This pack of Hi-Res textures is available for both DX9 and DX11.

Basically Crysis 1 has a small number of 1024x1024 textures.

Crysis 2 has a lot more textures, but to fit them on DVD they had to be 512x512.

It does make sense. Crysis 1's textures were: The dirt, the grass, the trees, the shacks, the ships, and the rare concrete buildings.

Crysis 2 has all of the above, but many different types of buildings, dead people/blood/**** on walls, graffiti, packages and items in roadside stores (like food, books, boxes, computers, etc.), more gun skins, street lamps and road signs, trash bags and EMAT fances, etc.

Great, maybe he can explain why the textures are compressed with DXT5, a compression technique introduced back in DirectX 6. DirectX 11 has two new image compression formats, BC6H and BC7. The entire HD texture pack could be about 20% smaller while looking better.

Great, maybe he can explain why the textures are compressed with DXT5, a compression technique introduced back in DirectX 6. DirectX 11 has two new image compression formats, BC6H and BC7. The entire HD texture pack could be about 20% smaller while looking better.

Maybe CryENGINE 3 doesn't support that texture type, since it didn't natively support DX11?

Maybe CryENGINE 3 doesn't support that texture type, since it didn't natively support DX11?

Yeah, that could be it. Also, the current texture format works for both DX9 and DX11 rendering.