I understand what you're saying, Darg. Yes, there are free mods that are better than commercial games (take Empires for example). But you can't generalize by saying that all HL2 mods are better than any Source-based games out there. Most of the time you will be comparing apples to oranges.
If I gave the impression that I meant all HL2 mods then my apologies. All I meant was that if two identical dev teams were working on an identical project it wouldn't matter a wuzumpah if they were licensing or modding Source. The end quality of the project would be the same.
I think that the Ship for HL1 took full advantage of the engines graphics capabilities. Just compare the grunts from HL1 to the people in HL2, and you can tell a world of difference. They looked like freaking cartoons, anyway, so the unrealistic, cartooney, exagerated (spelling) features of the first The Ship fit in very well. But this new version can't use a dated engine as the same excuse, so, yeah. I think the graphics are kind of a turn off when compared to other game/mod/whatever that are in the market right now.