The physics are generally separate from the renderer, though. And the point is that making a terrain engine that is up to date does not need cost millions. It can be done on a shoestring budget and the asset creation itself need not be too time consuming. After all, we're talking very simple building objects and vegetation. If one looks at what Stary and Jan Tuma, to name a few, have been able to do in their spare time with the current, admittedly obsolete, terrain engine, the whole "we don't have the budget for that, it'll cost millions" argument comes crashing down.
The thing is, if TK had made the effort to have those kinds of contemporary environment visuals, he would've run into the same bugs and fixed them. But he doesn't care about that. It's his vision of fun or bust. Unfortunately he isn't his consumer base.