Because SourceNext is a company that hires monkeys. 

Article is currently under construction. The screenshots are out-of-date and will be replaced soon. However, the ones that are not linked to and are directly visible on this page are a preview of the difference that modifications have made to the game now. Check it out! 

Update!

It seems that  Boris Vorontsov's incredible ENBSeries mod for GTA San Andreas works with Resident Evil 4, albeit with some minor issues. I have contacted the author of the mod requesting his attention... not too long ago, his website was updated with a statement that the RE4 compatible version of the mod was almost finished, and would be released within a day or two. I would like to take this opportunity to thank Boris for taking the time and effort to do this good for the community, lets hope the mod rocks! If it does, you can drop a note of thanks at his website's guestbook here. 

Update #2!

The mod is up and working now, I am copying a forum post of mine from an RE4 modding board, you can view the thread here.  

Alright people, the RE4-Specific version has been released, although the guy couldn't test it on the 1.1 patched version of the game.

I just finished testing the mod, and there's mixed news.

For one, the ambient occlusion screws up the visuals a bit, I'm talking out-of-focus screen blur as well as framerate drops... I'm going to email Boris soon, but first read on...

I modified the embseries.ini file that came along with the re4 version of the mod, and turned off ambient occlusion. That solved the screen focus blur, but the bloom lighting was still a bit overdone... so I modified some more values.

This is what you need to do to make your game look like the enhanced screenshot at the bottom :

ENBSeries.ini *Updated for version 0074E with Game 1.1 :

Update #3 :

A new version has been released that adds character model lighting effects, bump mapping, motion blur and depth of field to the game. Check Boris's website for more info. The screenshots in this article are now obsolete.

EnableProxyLibrary=0
InitProxyFunctions=1
ProxyLibrary=
[GLOBAL]
UseEffect=0
AlternativeDepth=1
AllowAntialias=1
BugFixMode=0
SkipShaderOptimization=0
QuadVertexBuffer=0
[EFFECT]
EnableBloom=1
EnableOcclusion=0
EnableReflection=0
EnableMotionBlur=0
EnableWater=0
EnableShadow=0
DepthBias=0
[INPUT]
KeyUseEffect=123
KeyBloom=120
KeyOcclusion=121
KeyReflection=122
KeyCombination=16
KeyShadow=119
KeyWater=118
[REFLECTION]
ReflectionPower=15
ChromePower=10
UseCurrentFrameReflection=0
ReflectionQuality=0
ReflectionSourceSpecular=50
ReflectionSourceTFactor=50
UseAdditiveReflection=0
ReflectionDepthBias=0
UseLowResReflection=0
ReflectionSinglePass=0
[BLOOM]
BloomPowerDay=18
BloomFadeTime=655
BloomConstantDay=2
BloomQuality=0
BloomScreenLevelDay=24
BloomCurveDay=3
BloomPowerNight=24
BloomConstantNight=2
BloomCurveNight=2
BloomScreenLevelNight=9
BloomAdaptationScreenLevel=25
BloomAdaptationMultiplier=7
BloomAllowOversaturation=1
[SSAO]
UseFilter=1
OcclusionQuality=2
FilterQuality=1
DarkeningLevel=30
BrighteningLevel=10
IlluminationLevel=30
AdditiveIlluminationLevel=30
UseAmbientOcclusion=1
UseIndirectLightning=1
FadeDistance=16
[COLORCORRECTION]
DarkeningAmountDay=0
ScreenLevelDay=50
ScreenLevelNight=20
DarkeningAmountNight=-10
GammaCurveDay=0
GammaCurveNight=4
ColorSaturationDay=5
ColorSaturationNight=5
UsePaletteTexture=1
[PLUGIN]
WeatherMod=0
[WATER]
UseWaterDeep=1
WaterDeepness=20
WaterQuality=0
[SHADOW]
ShadowFadeStart=40
ShadowFadeEnd=80
ShadowAmountDay=60
ShadowAmountNight=30
ShadowScreenLevelDay=60
ShadowScreenLevelNight=20
ShadowQuality=0
UseShadowFilter=0
FilterQuality=1
[ENGINE]
ForceAnisotropicFiltering=0
MaxAnisotropy=8
ForceDisplayRefreshRate=0
DisplayRefreshRateHz=60
[MOTIONBLUR]
MotionBlurQuality=1
MotionBlurVelocity=10
MotionBlurRotation=10

Now, lets take a look at some screenshot comparisons, we love those... don't we?

Click on the images to view their full sized versions. 

No lighting mods installed :

RE4 Bloom RC2 :

ENBSeries 

=====================================================================

If you have been unfortunate enough never to have played Resident Evil 4 on the Gamecube, slightly less fortunate (but still unfortunate, none the less) if you even skipped out on the PS2 port, and lastly, but perhaps the biggest misfortune yet, if you have bought the PC version of Resident Evil 4 because of the reasons above... or maybe just in hopes of finding better visuals and controls that the PC can afford; then you might have been severely disappointed, more so than a Marathi man entering his suhaagraat bed to find a goat sleeping inside.  

Never fear, though... as usually is the case with lazy developers rushing games on the PC, the mod community folded its sleeves and took on the ambitious job of making the PC version worthwhile... since clearly the people at SourceNext were incapable of even porting PacMan decently from any console, given their track record .  

First off, I'd like to recommend downloading the v1.1 patch released by UbiSoft, it adds fog and only a tiny amount of shaders to the game, but that's better than nothing given the fact that the game didn't ship with anything worth jack shit, much less this. Link. 

When you might have booted up the game and started playing, the first disappointment to bite you (right along with the extremely bland quality of the visuals and FMV videos) would have been the revelation that moving the mouse had no effect at all on the game... followed by having to plug in a game pad or simply trying to fiddle with the very awkward keyboard settings. (I think that when the sourcenext folks die, they'll go to hell and will be forced to play through the game with the same control scheme they made over and over again).

So along comes the first mod ever to be released for the game : MouseAim. It adds complete (emulated) mouse functionality to the game, including sensitivity settings and the ability to use the wheel to zoom in/out. List of downloads. 

A dreaded setback in the PC version is the complete lack of control customization. Most of the keys on the keyboard are unmappable, there's no weapon switching hotkeys, and last, but not least... THE FUCKING BUTTONS SHOWN IN THE CUTSCENES ARE INCORRECT! So what does one do?

People with Xbox controllers hooked to their PC's.

People with PS2 controllers hooked up to their PC's.

People using the MouseAim mod/Keyboard control scheme. 

Next up, the horribly butt-fugly textures and models in the game. A fellow named Albert (Wesker?) spent a precious 8 months preparing new textures for just about every surface in the game (almost!). This is a must-have mod if you want to play through this game even a little bit without having to barf over your monitor. Link here.  

Another mod is Odium's high-res leon head/hair skin. You can find the download link here. (If you can't download it because of megaupload's bitchery, don't worry... an alternative is the skin present in the texture patch, its pretty good res and looks decent)

And this one comes highly recommended by me. Its a mod that adds (Fake) HDR to the game, giving a subtle bloomy effect in some areas, as well as improving the game's colour levels and contrast making it look MUCH better. Link here.  

Lastly, there's a pretty nice tool released that allows you to modify the density, colour and transparency of the weapon aim  laser in the game. Link here.  

Modding instructions:

All the game's texture files are in a compressed folder called Xfile.Dat. Rename it to Xfile.gca and just extract the xfile folder from whatever texture modification you have downloaded into the game directory. Same goes with the models and skins, they use the xscr.dat file instead... so rename that.

To finish off, I hunted down some screenshots of the PS2 and gamecube versions from various websites, and am posting them here. I recommend opening each batch of images in a new tab  in firefox and switching between them to best notice the differences.

IMPORTANT NOTE : THESE SHOTS WERE TAKEN WITHOUT THE HEAD/HAIR SKIN LISTED ABOVE.

Note 2 : I have shamelessly taken some screens from various websites, though they have done me the ease of watermarking them so I don't feel like crediting. However, given that there might be a possibilty that they'd have reduced the image quality to trim file size, the difference might seem greater. If you notice any such case and are in the possession of similar screenshots, do email me.

Update #2 : Shots removed, video comparison added, please remember to view it full screen.

PS2

PC

Click here to watch the video comparison.

End note : In order to fully appreciate the quality increase the game gets from these mods, you need to have played the vanilla game first. To the mod community : We can never thank you enough.