One thing to consider, about using the Unreal Engine is the lack of Japanese developers familiar with the system.
In the West, many developers are familiar, and have used the UE middleware suite. The West has also had a long tradition of using middleware products such as Havok, Torque, Unreal, Source, and others. Whereas many Japanese developers still go with building the game's engine from the ground up.
Because of this, I feel that the Japanese developers using the said engines may just not understand it well enough to use it properly. Given time, I think they can do wonders with it - Square-Enix commented about how great UE3 was for making The Last Remnant (saying it cut significant time off of building the game had they used a totally proprietary engine).
As time progresses, and Japanese developers learn to use UE3, they will be able to make a more viable product.
Also, I understand that the 'systems need to evolve', but gosh darn it - When the writer says 'Oh noez! I don't getz the Unionz! I never haz played Ogre Battle b4! The oldest RPG I've played wuz Morrowind!'
I like the occasional turn based system. And for as much as they want to argue, games like Blue Dragon and Lost Odyssey have made the turn-based system fresh, and somewhat innovative. And I cannot wait on playing The Last Remnant when I get my X360 back - I may even buy it to support more SE projects on the X360.