Simple response: this is, in fact, a programming problem. The engine and graphics aren't really that impressive at all. It looks worse than Oblivion, let alone Oblivion that's been modded. And it certainly looks worse than S.T.A.L.K.E.R..
In sum, this is just an example of why it's a bad idea to make a game for the console first, and THEN port it, without putting much effort in. Hint: the game was made to run at 1280x720, at no higher than 30fps.
I'd imagine that in actual practice, even newcomers like Crysis will run better than this, while looking better at the same time as well.
And of course, to date, the ONLY outrageously demanding game that doesn't involve poorly coded engine-making is a heavily modded version of Oblivion; if you slap on ALL of the improvement textures, effectively changing the setting from "large" to "superOMGWTFsize," you CAN bring down any number of 8800GTX cards as you'll make the game use up more than the 768MB each card has. (remember, in SLi/CrossFire, each card has to have an entire copy of the game's textures)