It was both. I do see UE3 getting the blame for the "piss filter" when many games in other engines, including many PS2 games that came out much earlier also had that muted colors aesthetic. People forget that many films of the time also looked like that. It was simply trendy at the time.
Simultaneously, though, many double-A and low budget titles stuck very closely to the engine default shaders, lighting and asset samples, which were very gears-like, and many even tried to emulate that vey look, so there was definetely a UE3 "look".
But devs that invested more in figuring out their own solutions, and extending the engine also did exist. Other notable examples include the Mass Effect triology, Mirrors edge, Bioshock (especially infinite)...
Funily, I think Batman Arkham games benefit a lot from what that engine's strenghts, and it has that GoW art style itself: everything is super barroque and overly detailed through Z-brush extravaganza. Everything is dark, gritty, mossy, and wet. Anong other things. Yet, it rises above the mediocricy by executing it all so damn well. I consider Asylum and City as the epitome of what UE3 was. They encapsulate all the technical and artistic trends that were popular that generation and specially on that engine, and do it with flying colors.
Clickbait titles aside, his videos are pretty decent high level overview of some of the new stuff for non-developers.
