Actually it is realistic to have some ambient lighting in a place with even a dim light source like a candle or a torch. What the game engine appears to do in the interiors is have a light source influence a distance away from itself and no more. In real life there is no abrupt cut off like this. The light works more on a curve by being brightest near itself, and then propagates out to a residual value of zero only at infinity. In a room, because of all the reflections, refraction, and scattering of photons, what you end up with is ambient light. The game engine does this by having bloom near the light, and ambient light everywhere else. Their idea of light propagation is actually closer to realistic with the three values (bloom, circle, ambient) than this mod (no bloom, circle, no ambient). What the vanilla lighting gets wrong is the intensity of the ambient lighting, and the absence of the circle of light for each location where there is a model of a light emitting object.
What it really needs is a revamp of the vanilla lighting system. The graphics capabilities are barely improved from oblivion.
Here's a quote from 747823 regarding graphics in the game;
Spoiler
1. Graphics
Is there anything good to say about the graphics? I guess some of the interiors look nice, such as Dragonsreach. Overall, it looks like a game from 2006-2007, though. And I don't think "consoles" is a good reason to accept that. They could easily add variables to enable/disable specific shaders, and package the console versions with lower resolution textures and reduce the 3D model LOD level by 1 or 2 (If they even had an proper LOD system... will comment on that later).
> Shadow mapping is implemented terribly. The shadows are blocky as we all know, and there aren't enough slices, so distant objects either don't cast shadows, or the blockiness becomes insane. Terrain also doesn't cast shadows. Why not? It looks terrible to be standing behind a huge mountain at sunset and see yourself and trees around you fully lit, even though you should be in the shadow of the mountain.
> No implementation of modern graphics techniques. This is obvious, and there are some remedies for it, but nothing completely effective. For example, the particle and light systems look almost exactly like Oblivion. The falloff on light sources is incredibly unrealistic. Particles aren't affected by ambient light or light sources. Fog isn't affected by light sources. Grass isn't affected by ambient light or light sources. Most light sources don't cast shadows. There's no SSAO, HBAO, light propagation/reflected light, or any kind of global illumination attempt. There is no displacement for water, "foamy edges" for water, caustic seafloor textures, or nice underwater fog. Underwater looks almost the same as it did in Morrowind. And what's with the distant water? It's always a solid color, and you can often see the edge of the model, instead of it going all the way to the horizon. The subsurface scattering is a joke and looks terribly fake, Crysis 1 from 2007 had better SSS, as well as a lot of the other features I covered. I'm not forgetting FXAA, but that's hardly an improvement. MSAA looks better anyway. There are rarely "decal" objects to add unique texture detail. It would be easy to add a lot more single-polygon objects with alpha channels and a shader that projects their texture onto close objects in the direction of their normals. Then you could have some unique dirt texture decals in various places and not need to store every detail in the main texture.
> The textures and models are horrible. This is obvious as well, as there are tons of texture mods already. All of the rocks and cliffs in the game use literally two textures. Their UV maps are terrible and their detail level ranges from incredibly detailed (and thus too noisy), to so low that they look like textures from Doom. The equipment textures are equally bad - look at the orcish armor for example. There are no advanced shaders to add texture detail either. They could have had a "detail texture" which would have a much higher tiling size and would become visible while getting close to a model. They could have also added DX10 tesselation displacement for the PC version. The models are obviously low-poly, and I don't think there's a proper LOD system. Models for weapons and armor, for example, only have a first and third person model. They're both at full detail until they fade out of the scene completely. To improve visuals, there could have been 3+ LOD levels, with the nearest ones being higher quality than the models currently in the game. If done correctly, this could even improve performance.
> Covering up the lack of modern graphics techniques and lack of proper lighting model with screen shaders. This isn't as obvious, and I've mostly "fixed" it with one of my mods. There's bloom everywhere, and it's basically the same bloom from Oblivion. The eye adaptation is fake, and doesn't actually adjust the "exposure", it just makes the screen dark or light for a second if you look somewhere that's a lot darker. You can compare by using my new version of Realistic Lighting with the custom shader in ENB. It has real adaptation. There's a forced contrast increase in the game. This causes a "black crush" thing in dark textures, where detail is lost. I think the objective of this was to make the shadows look darker, but a better way to go about that is to actually lower the ambient color and increase the light brightness. There's also the unnatural "tint" over everything on exteriors that looks like a yellow photo filter, and saturation is very inconsistent. There's no shader for making lit areas be more saturated than dark areas (as it would be in reality). Nights and dungeons are way too bright, but this is more of a design decision, so I'll cover it in the art section.
It's a little over the top, but it's pretty accurate in a lot of cases.
Imo? It's a sign that Zenimax rushed Bethesda's dev team. Don't forget that when modders revamp the game, we number in thousands, versus developers who are under a hundred, and much less that deal with these issues. It's a criticism of the game, though, and it's a fair one. I just don't believe the finger should be pointed towards the devs. The devs follow what marketing wants - otherwise they don't get their paychecks. And marketing wants a fast, big release for maximum profit with minimal effort.

All the code is done, I just can't get it to recognize my ini file o.o Not sure why.