They really didn't. Compared with Reach, Halo 4's environment shadows are dithered, dynamic shadows are super low res, dynamic lights are tiny, texture quality isn't that great, the skyboxes switch to low-quality bitmap very near, the particle system doesn't seem to be used as heavily, water is a flat surface with no 3d animation, the LOD is some of the most aggressive I've ever seen, and there are noticeable compromises on gameplay and level design.No, but it is funny how 343 managed to out graphically in one game what Bungie had been kinda lacking in for say 3 Halo games? Makes me wonder bout the 3D modeling talent over there a Bungie a little........just a little though (They kinda did step their game up for Reach)
It's more a sidegrade than an upgrade from Reach, one designed to look more "polished" by throwing more detail up front and muddying everything else up behind low-quality FXAA and low-quality hazy bloom and screen-space godrays. The compromises are numerous and totally visible. Things like plasma chain explosions look and feel absolutely lifeless in Halo 4 compared with Reach.
Actually, I'd argue that Reach is itself not all that big of an upgrade from Halo 3, and one which has compromises of its own. Halo 3 is extremely limited in both details and image quality, but a major part of that is powering its lighting model. It's subtle, but a lot of areas in Halo 3 just plain *look good* (as does the specular model for dynamic lights).
Halo 3 also has quite a lot of neat touches. For instance, by the "banshees, fast and low" section on Sierra 117, you can jump in the river and shoot the fish. When you kill them, Halo 3's basic water physics take over; the fish floats to the surface and starts drifting downriver while producing 3d ripples in the water surface.
Halo 3 is tacky and low-details, but it does lots of what it does extremely well, and it's very fleshed-out and "complete" while permitting the designers to build things with very healthy range and scope.
Halo 3 takes a lot of crap because most of what it does really well on a technical level isn't in the realm of standard checkboxes that people easily notice on the fly... but as a complete product I think it's stuff that can nonetheless be appreciated.