All the videos weve seen on it.....All the next generation stuff that it does that not even doom3 does....The fact that that hardware to play it doesnt exist yet...
The way i see it, source was last years massive breakthrough engine, but because they assed around and delayed it its another one of this years engines.
HL2 has already been delayed 5(or 6) years already...Unreal 3 engine is not happening. The reason they have been delaying it is because they have been creating Source. This way they wouldn't have to have Unreal 3 engine to license and deal with all that. They can license their own, and get money for it, when other games want it.
Unreal 3 engine probably won't go on HL2. Like I said, Source is the engine, and a new engine would waste the 5-6 years they worked on Source, and HL2, and w/e else...