The thing is the game just looks bad because of the design.
This looks shit. 
This looks awesome
If your game is grey/brown it automatically looks like shit. If the game has some fine art direction and adds some colors it looks good.
If they would change to UE4 the main problem would still be there. (sure it would look much better but still)
Someone remade levels from HalfLife2 with UE4 and they do look much better than HL2 obviously but the boring visuals kill it and IMO the Japan level from Devils Third looks better than this grey/brown mess in UE4HL2.
maybe Devil's second third/Devil's fourth xD will use a better engine but changing the engine now would result in starting almost from scratch which would be pretty dumb.
Btw for whatever reason I was more impressed with the multiplayer mode than I was with the singleplayer mode.
