higher res textures and being able to blow off limbs are not entirely what I would consider to be engine features.
You can make large textures right now and put them in wads and turn up the pixel density right now in half life. It looks amazing!
Though on a side note I have to admit the 4 x texture densitys of the level geometry of sof 2 isnt something the half life engine handles all that well. It chops up polys to allow for splits on every 240 pixels and on texture repeats. It also keeps track of how sharp the light maps are depending on the pixel density.
This all boils down to the software mode support. Its a trade off rather than a limitation really. It shocks me to see how many people still use software mode. If SOF2 had support for Software mode it might end up with the same problems I imagine and in turn it would maybe even have a slightly larger fan base...
the death animations and limbs getting shot off are just cool features you can put into almost any engine.
However Cheating DOES SUCK and I couldnt agree with you more on that. though its not so much an engine problem as a side effect of Id releasing the source code to q1 and I imagine Valve has some cool ideas in the future to deal with this problem you may or may not know about.