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I don't agree. I haven't played/looked at the whole game, so possibly other sections are different, but my impression from that video is that it shows high level detail, but only in close quarters. There is always a solid wall or cliff-face close behind the characters, blocking off any distant views. For me, the epic vistas are what made AO and AE, particularly in Paramonia and Scrabania. If you could only have a short draw distance, I'd be very disappointed.
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Distance means very little in terms of rendering impact. If anything, the deeper the view point, the better as it means we can use lower poly models and higher level mip maps.
Maximum poly-count is pretty damn high these days on modern consoles and PCs.