i find it very hard to believe that you can claim the lighting in the original Unreal Engine is the same as in UE3 and Crytek2.
Of course things have changed. The basic lighting functionality has stayed the same, what changed is the amount of other things the engine supports - normal maps (earlier engines had bump maps, and before that nothing of that sort), multiple texture layers (UT99 just had basic LOD IIRC), dynamic textures and effects (moving, normal-vector-dependent, distance-dependent), post processing (bloom, blur), opacity (partial, full, "animated"), emissive maps (simulating glowing surfaces), distortion effects, and how much of that can be processed in real time with shader functions. And the resolution and number of textures and light maps. Basically, taken to extremes, if you take an UT3 material, you could easily process the surfaces of an entire UT99 level with the amount of computational power UT3 can need for one single complex surface.
The lighting then, the "plastic look", depends on what kind, how much, and what colour specularity the material is defined to have. I'm fairly certain you could achieve the exactly same results with the Crysis engine and the Unreal one, if you tried. Which you don't, because the two are different enough to warrant completely different approaches to materials and texturing.
Isnt the latest lighting system per pixel/per vertex while the old engine was per polygon? thats a MASSIVE difference in computational requirements
If UT99 would just support per-poly lighting, you'd see huge triangles on the floor when a shock ball moves. A rectangular room's floor would have exactly 2 polys available for lighting, meaning it'd interpolate the whole floor between a whooping 3 points each for those two - no matter how big that room is. You don't, so it doesn't.
What was per polygon was primarily pong shading, and that's in fact still used in many places, while lightmaps basically just add another texture layer. Realtime lighting goes beyond that and lights per pixel, always did. And yes, as others said, what changes is the number of dynamic lights computers can process at the same time - that's not a question of engines, but computational power (and maybe how much an engine is optimized for dynamic lights, and how much it trades off correctness for speed).