Don't worry. Crytek obviously doesn't know what they're talking about. Nerds who argue on internet forums?  THEY know what they're talking about.

You clearly know this because you've personally developed software for the console, know the ins and outs perfectly, and know full well for a fact that it couldn't run any of the new features. Yes? Just checking.

It should be able to run those DX10.1 / 11 features, just not at the same levels as a GPU with more power. You can only do so much with 352GFLOPS, but to say that it would only be performing at "lower engine-level" or "not able" to at least run them in some way is silly. The architecture is fairly modern, and it has new-ish shaders, new features it natively supports over the PS360. One way or another, those features can be implimented, since those features are there, whether it's at a high level or at a low level it's yet to be determined.  Tessellation for example could be used more than in PS360 since it's at least as good as the tessellator in the R700, which is already better than the 360s (don't know if they did anything to that R700 tessellator). However, you don't necessarily need to know EVERYTHING to understand that it definitely has a limit somewhere. Certainnly effects may be more efficient in Wii U compared to PS360 or graphics cards with similar power, (like for example, the Mobility Radeon HD 5650, runs at 15-19 watts, slightly higher specs than Wii U) since it's coded to the metal and perhaps due to the GX2 API, but it has a limit in power, like any other GPU, its max GFLOPS.

On this subject, the word of a dev like Crytek carries much more weight than the ones who've been calling it current gen.

Well, that's a good sign. Hopefully all the doom plaguing the system will have been lifted in a years time, and stuff like this is good groundwork for that.

The origional FarCry is one of them, was a massive game on the PC way-back-then, easily set the graphics benchmark which is something PC gamers have come to expect out of Crytek. (Hence the uproar with Crysis 2 being fairly meh graphically on release.)

Crytek also has Homefront now too.

As for games that use the engine...
You have Mech Warrior Online and Star Citizen, both of which look fantastic, they are however PC exclusive.

Mechwarrior: http://www.youtube.com/watch?v=orhOvbfyyJw

Star Citizen: http://www.youtube.com/watch?v=RlIWJlz6-Eg

For a full list here: http://en.wikipedia.org/wiki/CryEngine

Well sure.

But the cusp of it is, the Wii U can essentially do all the same main graphics effects as the Xbox One and Playstation 4, the main issue is, how many of them can it do at once?
Heck, we have already seen from various tech demo's (Like Unreal) that things like Textures and Partical effects have already had to be dialed down from the PC versions to run optimally on the PS4. (That's not counting framerates, Anti-Aliasing, Anisotropic Filtering and Resolution either.)

The Wii U will of course take a much bigger hit in that department, but we probably won't find out for sure how much untill later in the consoles life.

Monster Hunter Online is another game that uses Cryengine 3. 

There you go!

Guess we didn't catch this one. ;_;

Locking!