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Because the visuals make it feel more "epic." I realize there are a whole lot of people who still stand by their belief that "visuals don't make a game better," to which I must say: B.S.

If the game is already solid, better visuals only enhance the experience by making it feel more immersive.

Also, with a third person perspective, the camera angle is effectively a wider focal length, meaning the player has a more panoramic POV of the surrounding area. With first person perspective, the view point is more constrained unless viewing scenes from a greater distance away. (Plus UT2004 officially looks like ass by UE3 standards)