I do not think that our md2 format is VERY limiting @ the moment, because we can improve our models big-time anyway, when all the features already wip will finally work & the content will be produced to use what our engine already is able to deliver...
IMHO the md2 format is not the limiting factor here (@ least @ the moment) & models will not get any prettier when using just another format (we have theoretical support for md3 & obj files also afair)...
The most important thing regarding our animated human & alien models is imho to upgrade texture resolutions, enhance existing models with normalmaps (that will bring a lot of additional detail), add (decent) glowmaps for details like displays or other, add roughness or specularity maps & finally bring even more variation, detail & personality through modifications of the textures & integration of more different skins.
When this is done our existing models will look great.
But ofc. new models with more polygons, better animations & maybe even different model-LoDs could push gfx forward big-time also, especially the ones Origin is working on look great, but we should not forget, how much effort & work is needed to get from a static model to an animated one & character animation is one of the most complex things you can choose to do regarding animation, so...
Imho we should upgrade what we have, before investing much energy into integrating a format we have no content for & I am also sure that we can extend the existing md2 format if we need any features, like Arisian already has done by creating the additional mdx format for our models...