Yeah they ran fine, but they also didn't push the 360 at all.
Incorrect. Just because the games have some blocky models here and there sometimes does not mean much. There are more to games running than textures and polygon count.
Sub HD games
That is your reasoning for saying they do not push the hardware?
There is no "True" high definition. It has and will continue to change every few years. The original Genesis model claims it is high definition, some games even say that on their box. I have seen NES games do it too.
What about God of War III? It runs in 720p. It literally might be graphically the best game of all time but it runs in "Sub HD". Same with Little Big Planet, inFamous, Heavy Rain and many others deemed HD experiences. I can also point out titles like the Sly Collection actually only run in 420p, but they plaster the word high definition all over that.
Reach was pitted against Resistance 2, which wasn't even that great looking of an exclusive and mostly ran better.
I do not see why they were put against one another. Besides shooting things in the first person, the two are very different overall, it is like comparing Shinobi's gameplay to Mario. Both are platformers where you can shoot things, but that is pretty much where it ends.
The sections they put against one another are also fairly stupid. The first few scenes of Reach are designed to be small, the characters are unaware with what is about to happen. With Resistance 2, it is obvious the world is ending right as it starts, or whatever is going on in that story.
I do credit Bungie for putting so much work and effort to their online play. That is where they really shine, not making engines, but making playing the game online fun.
Besides ODST, they have made a new engine for every game they have made since like... Myth II... Maybe even before that...
They make a new game every two or so years. Not many developers are capable enough of making their own engine anymore, let alone with the amount of staff members they used to have (during Halo 3, they were much smaller than you would expect). The fact they can get these kind of games out and running so well, so fast is pretty damn impressive I would say. Halo Reach, for example has never had a patch and continues to run at 100% after months and billions of hours between all of the players. If there were any real issues with their games' engines I assume those people would be aware of it before you are.