I would say that models are part of the overall quality, and if you're going to show off what an engine can do then make sure it's done completely or not at all.
Half-arsed attempts just accentuate the engine developers as being amatures.
I mean how amazed would you have been with the Unreal 3 engine if Epic used untextured box-men to show off how awesome the shader system was by simply showing of nice vistas?
It's why I'm not overly thrilled at the Crysis engine, they only show a handful of character headshots, but in-game models appear to always be just out of a decent visible range to see what is going on. Having a very good integrated character system nowadays is very important to many developers.. it's all well and good having a nice looking world, but the engine should also be handling characters otherwise it's kinda pointless if you have to manually create everything for the characters.
I mean the entire point in design-tree editors is to minimise development and deployment of media. If you miss out character does that not defeat the object?
Could just be me as a Character/Environment Engineer talking there, but still.. I can't be the only one thinking that.