Because they can, and they are pushing technology forward by putting to use these new technologies. If every game were made to run on average-low computers, it wouldnt push people to by new, better parts to run these games.
games should be made to run on average-high computers. the max settings should be good enough to be impressive but the average settings, made for average PCs, should still look good and be playable. I honestly don't know about today, but when crysis was released your average computer couldn't run it. if you make a game that requires 4 cores and 4 gigs of ram but looks omgbbq amazing you're not going to sell very well.
then again, i'm not entirelly sure the graphics are an engine thing. MGE makes an 8 year old game look great, brining it up to such a point that its only the physical models that are dating it. if modders can do that on an old gamebryo theres no reason professionals can't do it on a new engine. switching over the the cryengine or the unreal engine would require them to rebuild from the ground up, while they have plenty of experience with gambryo and hence know how to push it.
Now games like Bioshock 2 (UE2.5) and Borderlands (UE3) look incredible @ max resolutuion with all effects enabled. Borderlands was also quite playable on my old single-core with just 2GB mem. I hope Beth is willing to give us the same high/low options.
yes, good options are a must. playing OB on low (that is with fog) is completely unlike playing OB on high. not really an engine thing, though.