It might be a good idea to reconsider the methods of rendering graphics in general instead of trying to enhance a dated technique.
A funny this is that this is exactly what Rage is a first step towards. The megatexture technology is certainly revolutionary, a completely uniquely textured world is something that we've never seen before, and the tradeoffs chosen to enable it more or less chime exactly with your description of Unreal.
This makes some of the reaction towards Rage all the more puzzling, and I can only speculate that it threw people out of their comfort zones a little too much. Many reactions focussed on how textures looked up close, quality of bump maps and shadows, and all but completely ignored the non-repeating texturing and insane amounts of polygonal detail in the game. (Aside: Rage's textures have been compared to - for example - an N64. Which is odd as the N64 could push what seems like more polygonal detail than you see in screenshots of many modern shooters that focus on high resolution texturing and pixel shaders. It's all a matter of which tradeoff you choose, but you can't have both - yet.)
In the end I guess that people have become used to seeing games that look, feel, smell and taste a certain way over the past years, and when confronted with something different they don't really know how to handle it. For better or worse, people
want to see textures up close, they
want to see bumpmapping and they
want to see shadowing. Or at least are so accustomed to them that they're not really aware of alternatives, and not certain what to think or do when confronted with one.
This is the inherent risk in trying something new and presenting it to the public for the first time. Daring to be different is almost like putting your balls on the chopping block. It's easy to forget that Quake also met with a bad reception and comparisons being made to Doom and Duke 3D that made it look poor, Q3A went head-to-head with the first UT and lost, and Doom 3 was met with fairly universal derision on release. And all 3 were downrated for entirely the wrong reasons, with the true revolution they presented not really becoming apparent until sometime later.
It will be interesting to find out if hindsight grants Rage a similar legacy.