The choice of engine for SC was actually a rather complicated issue. Many people have suggested that Unreal would have actually been better than CryEngine in some ways but at the time SC development started (i.e., around 2014) CryEngine was a much easier option to start with. Now that they've completely re-written CryEngine to unify the first and third-person perspectives and created so many of the ship models and interiors it's too late to switch back at this point. On the plus side, using Amazon Lumberyard ensures they have a solid platform to continue the game using CryEngine (or rather, StarEngine which is CIG's own modified version). There's also the issue of overlapping physics grids, bind culling and many other essential issues that CIG is well into the development process using CryEngine so they can't really switch at this point without literally throwing away 4-5 years of work.
From a technical perspective though they would have needed to re-write the entire fps engine regardless of whether they went with CryEngine or not because no one offered a commercial solution that could do what they needed the engine to do at the time. At least with CryEngine they have a solid base to continue development even if it isn't necessarily the optimal choice for what they needed it to do. It's debatable whether they would have been better off just completely writing their own custom engine from scratch but at this point they have no choice but to continue with CryEngine.