If its not broke, don't fix it. Certain aspects can be made better and I'm sure they will but the basic engine is fine in my opinion. Hopefully all this time has been spent on storyline, factions, sidequests, guild quests, etc.
But it is broken. Morrowind has the same random crashing bugs than Fallout New Vegas has that weren't ever fixed.
The particle system is awful. Even on the best computers you still get huge FPS drop if you stand inside particle beams, for example in the propylon chambers of Morrowind.
The engine drew everything even it was behind obsticles. Thus we had closed cities. I guess consoles (PCs could have open cities via mod, no problems) couldn't handle drawing the high detail meshes of the forest and the city at the same time, even there was big wall between them.
The engine has done more than its duty. I think it would be about time the engine is dragged to nearest forest and put to death.
If they really did go for new engine I hope it still has the modding tools as good (if not better) than with Morrowind and Oblivion had. Also the open world is a must have.
People are focusing on the original tweets announcing the engine. They're missing the second tweet Nick Breckon made http://twitter.com/nickbreckon/status/14059634595729408 in response to the question of whether or not it uses Gamebryo.
It's not Gamebryo. It's not an iteration of Gamebryo. It's a new engine. There's really no arguing that at this point, as they've specifically responded to the question of whether or not it's based around the prior engine.
That's best news I've heard.
I hope they add tool similar to TESCS while they are at it.