Unreal Engine 3 has gone free (see UDK). (My own issue with UE3 would be that even the best UE3 mods seem to be deserted by players... , but with the Engine going free now and UnrealTournament 3 no longer being a requirement, maybe that will change)
There is talk about CryEngine 2 (i.e. the Engine behind Crysis) becoming free as well. Also worth mentioning is that Crysis is the basis of what i consider to be the most incredible mod of the decade. To see what's possible, check this out:
http://www.mechlivinglegends.net/ ... amongst other things, one of the maps is a large rotating asteroid, with lakes that freeze over/melt depending on whether the side you are on currently faces the sun.
Might want to take a look at this again. If DRM played a huge part in this vote then it has become nill and void, because there isn't any DRM in either engine after they go free
With Source Engine you still need to own a source game and install it as a mod and as good as Source is, it really is showing its age by now... with free UDK and hopefully soon to be free Cryengine 2 you would get a more up to date engine and the game/mod could be a standalone download too.
I also don't see Crysis system requirements as a huge issue... back in the day i played it on a AMD dual core with an Nvidia 8800 GTS 640mb in 1280x1024 with all high settings in DX9 just fine and it looked just amazing.
Sure, if you want ALL the eye-candy and set it to "highest" in DX10 and want to play in 1920x1200 HD too then yeah, you need beefier hardware... but the engine as such scales quite well and still looks amazing on even a 500-600 $ PC if its built at least somewhat well.