Very interesting read and very thorough. I think it's important to note two things though:
1. Crysis 2 as a whole was a bumbling mess. The game leaked some 40 days early (and then when people heard about how dumb the clusterforget plot was and how linear it was it went on to be most pirated game of 2011
http://www.pcgamer.com/crysis-2-most-pirated-pc-game-of-2011/), and the game was probably half/quarter console port internally which sucks because it was the 360/PS3 at the time. On the other hand though, the game still looks pretty damn well even on low/medium settings when I first played it (I think I played it with a GTX460 not long after the 400s just came out), the optimization is kickass and tessellation didn't do much impact in performance except in large extreme scenes, but that doesn't excuse the engine from still being a mess internally especially regarding the water...
2. Crytek wanted to probably flare their CryEngine 3 lats and show how super cool and up to date it is. They had a comparison page showing off how super cool brick walls will look in the "Ultra" patch. I tried looking for it but looking up "crysis 2 tessellation" brings literally hundreds of results of the same thing OP talks about which speaks a lot.
I'm just glad Crysis 3 actually went on to be better looking, much more fun and open, and actually tie up all 3 billion loose ends in the plot (sort of kinda maybe).
