i think it could reach the U3 engine when you consider that this engine was built from the ground up for the 360 when the U3 engine was built with the wider range of hardware in mind.
an interview with CliffyB at MS's site had him saying that the current build of Gears of War uses 80% of the systems power, now that power i imagine was measured by the crappy dev kits they had at the time.....
......so if you figure 80% of a dev kit that is roughly 25% of the total system power then there definatly is a lot of room for improvement.
will it exceed it? i dont think so as the U3engine is a constantly evolving engine but so can the trinigy engine.....
......if their building the engine off of early dev kits without the thought of improving and optimising it for more final kits then that would be totally pointless.
i think its just exciting to see dev teams having more and more choices for the 360 when it comes to developing games for it.