"engines" cant look good. Games do.
Unreal Engine 3 is, in many ways less advanced than Doom 3's renderer, but honestly, the content is better and higher quality, so the game built of UE3 looks better.
By the way, Epic is the #2 engine developer in the world, and Valve has yet to release...
Unreal Engine 3's renderer was completely rewritten. Doom 3's renderer was also rewritten.
HL3 doenst have to be cutting edge tech, its just gotta be fun, Source engine will be able to power games for years to come.