That's more to do with the fact Bethesda artists either produce by design textures etc aimed to run in potato PCs, or they're just not very good (or a combination of both) rather than the engine's fault.
Take a peek at some Skyrim modded characters:
Source from images is this mod (has lots more pics):
https://www.nexusmods.com/skyrimspecialedition/mods/1825
My Skyrim install looks as good as any current top notch game, but it probably doesn't have a single vanilla texture in it and very few original meshes. It has also modded lighting, weather systems, water, grass, forests, etc etc which combined makes a gigantic difference in graphics, but the point is that in the end i
t's all running under the very same Creation engine as plain old vanilla skyrim.
Of course, my current skyrim build would most likely run at 2 frames per second back in 2011 when the game was released, and that if it would even run at all instead of CTDing immediately.
If you wish, take look at a couple of skyrim ultra-modded videos (youtube is full of them) to see what the engine is capable of doing.
TL;DR; It's really not the engine's fault why the vanilla graphics are poor, the engine can actually run with very impressive visuals as well.
Sorry for the lenghty OT.