While I don't think they have to rebuild their engine for ray tracing, I do agree that the assets they are using and the quality of their rendering isn't outshining anything current in terms of graphical fidelity and artistry. The most impressive part is the consistency and scale which outmatches everything we have seen. But depending on the game, that alone doesn't matter much at all. I am personally more impressed by the large vistas in RDR2 or just the character models and gun models we saw in the latest TLOUpt2 footage. I expect next-gen to look better than Star Citizen does now, almost universally. Maybe Star Citizen is a "this gen.5" in some respects. A jack of all trades but not a master of all trades.
Reading it like that makes it sound like a complete waste, and that they either have to focus on one aspect, or just do everything completely from scratch all over again.
I'm looking at the game and asking myself "why can't all the other AAA games put this amount of effort into their worlds/visual fidelity?".