Afaik Unreal would work for any format but as you mentioned it's probably quite pricey.
I love a good RGP and it certainly isn't required to have great graphics but I can't think of a single RPG made with a state of the art engine like Unreal's, I wouldn't be all over in a heartbeat.
Just imagine how great games like PlaneScape or Fallout would be on state of the art engine, woot!
Errr, of course I mean like they are now in every respect with just new graphics, certainly not say bethesda's vision of Fallout with a good (not great) engine, well at least with their track record.

One thing about an engine like Unreal is its life expectancy is usually at least 4 years, so what we are seeing now is only what most PCs can handle, atm.

I would say from what little I know that had PB for example had been given Unreal 3 cost not being any factor and unless their engine is similar creation methods they could have spent 6 months learning it, but with their unmatched skill at geo architecture they could/would have created the best looking game world ever seen to date and maybe for several years to come.