I can't help but disagree with those saying from a technical standpoint 2 looks worse than 1.
TL;DR: Cry Engine 3 is the same as CE2, Crysis 2 has exactly the same features built in that Crysis 1 did. If it looks worse to you, it's probably down to your taste about New York vs tropical island.
Cry Engine 3 is exactly the same as Cry Engine 2. Hell it even has more options technically. It works exactly the same way as CE2. The built Crysis 2 on the editor just like they did with the first game and the expansion. Every technical aspect works just as it did before, and if it doesn't, it works better because they implemented a new way to do it. CE3 is an updated CE2 so water, motion blur, particles, character models, shaders, physics, shadows, post processing, you name it - works the same way, can look the same way, and it does in fact look the same in Crysis 2.
Character models look the same, that great object and radial motion blur looks the same, the depth of field looks even better because it's now bokeh (don't think they had that in CE2), water looks as great, and just by looking to it you can see it's pretty much copy paste from what we had in Crysis 1, shadows are the same.
I think I'm repeating myself here, you get the idea right?
The difference between Crysis 1 and 2, technically, comes down to whataver is the difference YOU want to have. Think shadows look worse? Tweak them, add cvars to the autoexec, make them look as good as you want to. Same goes for w-h-a-t-e-v-e-r technical aspect you can think of. I was tweaking the LOD to my liking a few hours ago. I even got the game to load everything but buildings within 5 meters of me. I can make the LOD better than Crysis 1 if I want to. You can turn off that blurry AA too you know. Add whatever AA you prefer after.
It's virtually impossible to say Crysis 2 looks worse than 1 from a technical standpoint, save for the odd thing like POM.
If you tell me you don't like it being in NY, or that you don't like the lightning, then I 100% respect that - these are the things that are down to artistic preferences, and just as Crytek thought they were the best, you may not think so. But that's purely personal preference.