Otherwise commonly termed "LoD" (level of detail). You swap around low resolution textures with high resolution textures in a streaming data flow.
None of it has anything realistically to do with copy and paste terrain(Lod is strictly a memory saving trick, and works with anything. Look at Drake's fortune for instance), unless they have a problem with HDD space.
Copy and paste terrain...is copy and paste. What else did anyone expect?. Nothing is going to solve it without good old grease work, or other wise known as paying your graphics artists.
Sure there are tons of work on procedural generation (otherwise known as random dungeon effect), but realistically, it's very hard to have a computer trick the human mind. It's easier and sometimes cheaper to have a human trick other humans.
They probably didn't want to pay the bill, so ended up copy and pasting. Either that or you had very stupid QC people that got tricked by their employees...given the horsebird incident I'm not willing to rule it out.