It was an FPS that, IIRC, was built on the Quake engine and came out maybe '96 or '97. It is, to this day, the only game I have ever played with "realistic" dismemberment. Unlike games today that have dismemberment, where if you slice off someone's arm/leg they die, Chasm had all manner of enemies that would still function (though with limited capacity) if you cut off an arm or a leg (and in some cases, their head).
Cut off an arm, and they simply won't use that arm (good for one type of enemy, who's right arm was a chainsaw). Slice off their leg(s) and they would crawl. Cutting off their head would usually result in death, though in this specific game there was a type of enemy that could only be totally killed with a specific weapon, so even chopping off their head would have their headless body keep coming at you.
If this kind of stuff could be done back then, I see no reason why it has never been used in more modern games. It would be really awesome to severe the sword arm of an enemy and have them give up or continue attacking with increased fervor, but diminished results in Skyrim; or any other game, for that manner. I would hope that perhaps the more talented modders out there (I can only make things straight through the CK; not too good with Script Extender plugins though) will be able to add something like this later on and not just dismemberment in and of itself.