Technology as a Friend
Now you're opening up a whole new can of worms. Sure Half-Life's got a great storyline and awesome levels, but you know, that's not your standard Quake II engine driving the game. According to Valve, it's only about 40% original id code. Valve's added 16-bit color, skeletal animation, 3D-sound support, and a slew of new features, as well as tearing up and rebuilding code from the Quake, Quake II, and Quakeworld codebase - in short, building a game with new technology. Would it have been nearly as engrossing if the NPCs din't actually turn their heads to look at you as they talked, or open their mouths in sync with their speech? Personally, reading a text caption in a dialog box just don't catch my interest, nor does simply watching a model run through some idle animation frames.
Another factor to look at is increasing realism. Even Quake, with its "full 3D engine" couldn't handle complex geometry, large world sizes, or even rotating brushes. As computers got more powerful, the technology to build bigger, more realistic worlds naturally evolved from the designers' wishes for more artistic freedom. Those beautiful curved surfaces in Q3 would never be possible with Quake's brush limitations. And it's not all about creating huge, CPU-slowing gaping mouths either.
You've seen the deathmatch arenas in Q3 - the use of curves is rather limited and subdued, and works to make the level designer's jobs easier. No longer do they have to choose from a stifling library of 3 types of arches. Now, they have the ability to quickly throw together whatever fits the scene best, without having to meticulously create every block, piece by piece.
Yes, but do they make the game more fun to play?
Uh….hello? OK, let me use smaller words for ya: Do they add more atmosphere (3 syllables, sorry) to the game? I say definitely. While hardcore gamers may want to turn the tessellation up as high as possible once they've gone through a level a number of times, having more interesting and realistic geometry makes for a more immersive experience.
You spoke of Unreal earlier, but you downplayed the fact that the game was so slow, even on high-end machines, that few people got "the full experience" of the game. There's nothing wrong with the Unreal technology (besides the network code), and it's being used as the fundamental base for Unreal Tournament, with relatively few major changes.
Well, what really upset me about Unreal was the time they spent to make eye-candy for the game. Before it was released, I was reading .plan files about how thin-walls were "lighting-translucent," or about how advanced and unique the fire engine was. I have to admit, I did say "damn, this is sweet," when I first saw the game running, but after a little more than an hour, what did all those man-hours of work come to? Not too much. The more frivolous features packed in for the sake of "technology," the more it can strut its stuff on a still screenshot or a low-res AVI, but when the it's time to PLAY the game, what really matters besides how fun it is?