I think the issue with this screenshots is the smal texture size and the indexed colors.Due to this they don't used bilinear filtering and the quality of the pictures is bad,very bad.
Porbably they did the artworks on the GC dev units,and the memory of that is very limited.So,they didn't spend to much time to optimize it (because the time is cost), and they don't use the extra memory.
The far cry use same 2-3kbyte texture instead of a good loking 20 kbyte texture on some "mission critical" places, like the user hub.It have to be some big bandth/rendering issue (the far cry wasn't on ps2 or on gc) or same severe memory issue.
Personal oppinin:the softwares that loking very badly is not using texture optimized rendering but same other rendering optimisation method (probably for xbox or pc)
The guy that created the textures calculated with 1 megts tex buffer,not with 24 megs of tex buffer.