Valve is my favorite gaming company, but the source engine?

Don't u think the source engine is outdated? Just look at IW engine of COD black ops and Frostbite 2 of battlefield 3 they are the best in the world in terms of realism and physics and many other engines. I don't have portal 2 yet, but still i don't think it is much better than the updated source engine of left 4 dead 2 graphics, no? Valve should really work on a new engine now. I want Half life 2 episode 3 with best graphics ever. I mean valve should have ironsights for there games instead of crosshairs. However still valve is my favourite company as I love there games in terms of gameplay not graphics, but seriously we are in 2011 and i dont want valve to be behind, i want it to be number 1 :) So what is ur opinion guys\girls about the source engine, ironsights, graphics, gameplay, etc?