Lesse here... Realistic physics? Check. Realistic lighting and water? Check. Characters and textures that look fairly like they're in real life? Check.
No no no, let me explain. All those things were pretty technically impressive years ago, yes, but Valve's purpose with Half-Life 2 wasn't to look cutting-edge. They actually considered dropping bump-mapping during it's development. Valve use the Source engine's visuals only to compliment their storytelling and gameplay. It's a stylistically good looking engine, not a realistically good looking one.
Their implementation of rim and phong lighting doesn't look particularly realistic, but it still looks damn nice, because it's stylish. You only need to listen to their commentary to learn their game goals, they value solid gameplay and style over realisim.
Point is, Source is the next step from GoldSource, it makes sense to move onto it. It's familiar, but powerful enough to open up a whole bunch of new possibilities, and it's definitely not hard to learn.