SC2 looks better than Tiberium Wars even on medium settings. If they made the graphics much better performance would suffer greatly. There's a 200 pop. limit for each person with up to 8 players in a game + buildings + all the little 3D images for you units + a tirade of other environmental events, and considering the level of detail of each unit I'd say it looks pretty good.
Bottom line it was for performance and also to allow themselves more time to work on balance and gameplay.
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