The Dark Mod is open source.
That means that it can be advanced to have capabilities beyond Skyrim or any of the latest engines.
The limit is only up to who contributes code improvements.
Going to a closed-source commercial engine would mean you would be stuck with the technology level of that engine.
Now, if you want TDM HD with higher resolution textures and models, that is already possible but would take a ton of work.
We are only now getting to the point where larger missions like Crucible of Omen: Behind Closed Doors or
Lords and Legacy runs reasonably well for most of the player base. If you boost all the requirements due to all these improvements
we are back to smaller missions like Return to the City being barely playable for most users.
All that said, TDM has had gradual or even drastic asset improvements from it's demo release until now. Over time we may yet see
more of the low-poly models and low-detail textures all replaced with improved versions. (Depending on either outside contributors or
internal developer motivations of course.) That, along with the march of technology and code improvements to the project should
allow TDM to continue to offer better and better experiences.