and also, transferring to a new engine would require a lot more coding and data exportation and importation and testing than just continuously improving the current engine... it might even be easier to just make a new game in that new engine rather than porting an already existing game...
and yeah, keeping the graphic options is nice since it allows people with not so new computers to play the game... seriously, there's a lot of good games out there right now but the system requirements of those games make it hard for normal people to play them...
PS: I'm one of those who really don't appreciate developers trying to achieve "realistic" graphics...