Quake3 doesn't take advantage of everything the GF3/4 can do, so they're coding something better I guess.
The GF4 doesn't take advantage of everything the GF4 should do. Some of the 'lower end' GF4s are just remarked GF3s and lack all the new features, can't wait until the people that buy those try to run Doom3.
I think royalties and the "act of bowing down to id software" by licensing it keeps a lot of people from using it. Other engines like LithTech have to be cheaper to license.
If you feel it's 'bowing down' by licensing a product you won't be in business very long, id makes very good game engines and they deserve they acclaim they get. And why do other engines have to be cheaper? id has a lot less people to support, they should be able to work out a lower price without hurting the company.