Yeah go back to that old material editor which loves to cause infinite loops or a mess of code from what seems like 10 different games all written by strung out coders on various levels of caffine withdrawals.
If you are gonna start on the technology pro's and con's of each you should really be objective.
I see UT3's codebase as much more polished, its better commented and adheres to a standard which is very consistant right the way through. Theres better editors for particles, materials and theres thumbnails for alot of the assets in the browser. Sure I dont really like the UI editor but theres alot more Im not listing.
What 2k4 does have is establishment, its got a well built in community who knows how mods work not to mention its easier for people to run them. Its easier to adjust the UI even if the editor is lacking a UI editor, it can be done in the game and copied out to code. You certainly wont have people asking for PS3 ports with this one but you are limited (as far as I know) to a dx8.1 interface, where UT3 has dx9.0c support with the possibility for it to support dx10/10.1.
UT3 has better adjustment for static mesh lodding vs 2k4 which uses a more fixed system but it allows for zone portals to be setup to cull meshes which are the correct amount of zones away. UT3 also has an upgraded animation system with better support for blending and tweening, especially in respect to characters foot placement. 2k4 doesnt allow for ragdolls to be sent over the network but the vehicle collision is very similar between the two engines.
2k4 maps perhaps compile quicker depending on what you are doing but you dont have the access to the newer lighting, there are ways to get 2k4 to look better but to really extend it you need access to native code. The particle system specifically emitters in 2k4 are rather good but it seems the upgrades in UT3 work well to take load off the cpu.
All in all both engines are feature packed though and it could depend more on what your target audience is, like I said earlier a big thing UT2k4 has going for it is establishment. Theres alot of mods for 2k4 and Im sure that'll continue, just as new mods are being released for UT, there has also been some unofficial support on that end of thing so you could be looking to see what epic does with the 2k3/4 source.
Honestly if I was to leave UT3 modding behind it wouldnt be to go backwards, I might still mod for UT2004 still but if I had to chose a complete alternative Id probably have to say I would use the QW:ET engine. Those mod tools have been released and the game patched to v1.4, this would be more of a step to the side rather than a step backwards.
It depends on how you see it though, ofcoarse its not just all about graphics! I could go into more depth for the code features which relates to gameplay but it isnt really all that impressive at face value (you really have to get in there yourself). I will say though that there are some really good advancements in the engine which will allow people to take things further than they could with UT2k4, especially when not bound to the limitations of the console. Please realise that UT2k3 was originally developed as UC with 2k4 being reworked or something to the like to become UC2 so through out each iteration, console or PC, there are advancements to the engine which relate to both gameplay and graphics.
UC2's UI was infact better than UT3's, but hey thats only a console game right its impossible to make a decent UI on those
lucky Epic had access to the engine on that one and it does make you wonder where all that went. If it was funnelled into UT3 or perhaps dropped in favour of reworking the UI in its entirety.