It looks like it's at about Quake I standards in regards to quality of models, though less blocky.
All of this points to an either a) lazy art department or b) an inexperienced one. Yes, the 3d models point to dated work, but it could be the coders of the game are also doing the graphics and maybe they're not as experienced. Maybe they're using artists that aren't experienced or lazy? You don't know how powerful an engine is, until you push it.
Prove me wrong, though. Make your own 3d models for it and use the game engine to build a new game.
I am more curious if the engine supports quads or if it's still using triangles. Does it support normal mapping and/or bump mapping? What about texture mapping, is spec included? Can you use displacement maps? What's the max poly count on weapons and items in-game? Does it have it's own built-in effects or do those need to be created as well? Can I import a map I build in another 3d application to use as a level? What's the max poly count on levels?
Those are questions you should be asking, rather than saying the graphics you see are dated.
