Perhaps I'm just a bit behind the times in this sort of thing or it's my lack of tech-savvy, but I don't really get what's so horribly wrong with the way Bethesda's games look right now, all things considered. Sure, the animations and character models could use some extra development time, but other than that I haven't seen games with those kind of behind-the-scenes workloads look as good as TES. Maybe I'm just missing something because of the TES-fan glasses on my nose :shrug:
To be honest, as I've seen Cryengine 2 being used as a benchmark a lot, I'd like to see how it would run a full on TES-game. I just don't know if it would be able to handle the added workload of some form of radiant AI, rpg-gameplay, immense vastness et cetera and still look as stupendously good. In comparison, Crysis-style games don't seem to do as much at any given time. I think that, no matter what engine, we still wouldn't get the level of graphics we see in other open world titles for the next TES game, simply because of the amount of content and workload that's involved.
Be that as it may, I'd love to see Bethesda pool their resources with Id further down the line, it would certainly benefit the company as whole. For now, we will probably see Bethesda using a version of Gamebryo that implements newer techniques and stuff, and that's really just fine by me.