They are also limited by their
system requirements, I don't think they have ever said specifically the limitations they have to work with but gamechangers that have worked with them have mentioned things that they can't build lots that have too many objects and I can imagine this is also restricting them in how they are designing their worlds.
I'm not sure the engine can be upgraded or improved, the thing is that people that are running really good graphics cards are experiencing lag or performance issues, this hints that the engine can't use better hardware very effectively.
One thing that I have suspected recently is that the game is also very CPU heavy, if you don't have a good enough CPU you are going to experience simulation lag and even then, there are so many things that are running in the background now with so much DLC added to it.
