Its easier to develop games with 'limited' land mass travel. if you create one huge map like in Oblivion it will never be spectacular. Like OP said - indors are all spectacular graphics but outdors not so much. If there is no instancing - its so much more difficult for engine to process the game. There should be a balance where super pretty graphics meet the appropriate size of the explorable without loading screen landmass and the overal game performance. If this balance broken than one of the other 2 pieces will suffer.
I personally like the graphics in Divinity 2. And some instances in DKS probably look as good as I've ever seen in RPG before. I play game on PC with Extreme graphics and Anti Aliasing enabled - on these settings even the outdoors look spectacular. I think DKS devs were able to meet that balance where graphics meet world size and good performance.
