they do have a lot of talent and the website is pretty flashy and theme-appropriate. I agree in general that the in-game rendering is where things seem to go bad. Some theories:
1. impossible to create normal/specular maps that actually look good in a quake engine? No,
tenebrae looks pretty good, at least in some shots. Maybe the problem is everyone uses really intense specular maps?
2. quake
.mdl skinmapping is so bad that any attempt at a high-res texture will accentuate the terrible stretching, which is sort of hidden by low-res skins.
3. darkplaces/etc. lighting just can't look that great, and it's maybe because the doom3 lighting model is fundamentally bad for aesthetics (i.e. too stark, too many pitch-black areas, no illusion of diffuse light)
4. the maps they pose these models are badly lit, and results in ugly lighting on models.