If they had the technology then they'd be doing it already.
Network speeds are not really good enough to house lots of players in realtime, upload speeds for instance are different per player, so no matter if you have a crazy broadband connection, upload speeds are still rubbish. MAG probably compartmentalises the players, like only updating players that are relevant - if someone is half a mile away, then there's no need to update that player.
The current generation of consoles are kinda pushing their capabilities already, Red Dead Redemption has some crazy detail on screen, I don't think we'll see much more than that from the 360 or PS3. The worst thing ever is when they try and push too hard - just to be able to claim some 'record'. Like when they have hundreds of enemies, but to do that they have to be low quality, practically no AI, no challenge to kill.
What I like about MAG, is the fact that you could go and look for trouble and find it - massive maps with actual players in, they might not stand in a queue for you to own, but at least they are out there. People just got stuck in a rut with BF2, you can walk for miles and not see anyone, pointless IMO. People who play MAG properly see plenty of action

- people who lie on their bellies and snipe the whole match, well they can go to hell and die.