Unity 4 is their big high end DX11 push actually, they are trying to show that they can scale to the high end, the demo is likely running on a $3000 PC. And the first game to show off UE4 is a free 2 play PC game, and will scale to mobile. Crytek are pushing heavily into the f2p space as well especially now they are pushing their "core gamer" social network GFace. 

"Unity Technologies, provider of the Unity multi-platform engine and development tools, is excited to announce Unity 4, the next generation of the Unity development platform. The launch of Unity 4 demonstrates the platform's AAA push that levels the playing field between the largest and the smallest studios, enabling anyone from the most indie game designer to the biggest multinational AAA studios to develop amazing groundbreaking games, and effortlessly deploy to multiple platforms. Customers who pre-order Unity 4 will be offered early access to the Unity 4 beta.
Unity 4 includes an overhaul of the Unity engine and tools suite to accommodate critical new features such as the highly anticipated all-new Mecanim character animation system, DirectX 11 support, hypermodern mobile graphics, and the addition of Adobe® Flash® and Linux as new publishing platforms. These new features and improvements comprise the first in a series of Unity 4 releases that will empower developers with the first truly democratic AAA game engine."

http://www.marketwire.com/press-release/the-next-generation-of-the-unity-game-engine-unveiled-1670512.htm

That looks even worse than some current gen games...laughable compared to the luminous engine.

the tech demo didn't impress me.  these number however do.  i can see a lot of downloadable games (psn,xbla) useing this and looking amazing for the price.

The Vita and 3DS will be all over this engine.

indeed I meant that...still early

Don't get me wrong, I realize they were showing it off on impressive hardware, but I still think the core market for this engine is "low-end" development ...

I expect that they're pusing newer technology to create the possibility for a developer to target more/all platforms. Someone could (in theory) build a simple 2.5D game that runs on everything from the 3DS to a high end PC and looks nice on all of them; but I don't think that many companies that are targeting high end PCs or next generation systems would choose the Unity engine.

After seeing UE4 and this. It's clear that new engines are focusing on lighting effects.

Polygon count is not everything. I would say the overall appearance and texture rendering is more important to me. That's why I still prefer Crysis 1's graphics over Crysis 2's (this is coming from someone who has maxed out both with mods). The Unity tech demo shows us low res texures and washed out colors. In its current state, I'd say that it does look worse than some current gen games. But then again I admit that this is just my own subjective opinion. 

It looks like a pixar animation, the real-time lightning will be one of the pillars of the next gen games.

 Do you even know what subjectivity means? I claimed subjectivity because I know I'm being biased. Although I feel that I can properly defend my opinion, I didn't want to sound ignorant and claim that my opinion should be everyone's opinion. I agree, the screeshot comparison is not fair... I stretched the uncharted 2 picture and so it looks more blurry than it actually is.

What do you mean by budget? Do you mean computing budget...because the Unity 4 tech demo is definitely running on a much higher budget. You mentioned the cloth and skin...seriously? That's an incredibly weak argument if you're saying the cloth and skin in this tech demo is impressive. Maybe the physics but not the appearance. And that is an objective opinion. I don't even need to post a picture of current gen games that look better than this demo.