The engine alone can't making bad looking models better.
It is also a question about texture size and shaders to use. EU = MMO game needs to have as small as possible texture sizes, to get a average playable FPS. The showcases of the engines, most only show small levels with super large textures. But in a large world like EU is, it would kill the performance. Itz not the same as multiplayer game like Armored Warfare, what allow a bit larger and more complex shaders.
It would also need to redesign materials, and even the textures, and also to use a bit more polygons at models, for increasing the look of EU, with the result, that then most ppl cry about low FPS. Agree, that they could make some models a bit better, but i think they balanced all this not too bad, so we all have a good frame per second feeling.