1. Half Life 1 having been released in 1998 was darn epic for its time, even in terms of graphics. If you're comparing Half Life 1 graphics, compare it with something with Deus Ex 1. For that time, the graphics were awesome! You can't compare Half Life 1 graphics with Half Life 2, just not right.
2. Half Life 1 'has' been re-done with the source engine. It's called Half Life: Source.
What I'm really waiting on is the release (if ever) of 'Black Mesa'. That would again be epic, the old story line with the new age graphics.