First Google Earths restrictions are quite easy to work with, anything that isn't allowed with the EULA is usually fixed with a quick letter.
Secondly, I could make every building in each of those photos 3d if I
chose to, just expect a massive download. With custom objects, in terms of polygons buildings are very cheap if you just create the rough shape. Using the TE I created massive 10 mile square cities just to test how far you can push it. Even with a terrain of nothing but cities I was able to get a frame rate of 20, however using a 9800GT. The question is time and player base, I can create a hi-def terrain with the current tools we have no problem. The big problem is not making so pretty that half the users couldn't play it, (sheeez I sownd like a gaem dev their).
Right now I am doing a lot of playing around, seeing what I can and cant do. Mostly its for the enjoyment of a good challenge, and partly to see if it will even work. Which by the way anyone who wishes to see the B-29 in AH2 send $20 to my paypal account. Its a fixer upper sitting on the tarmac waiting on servicing, the lazy mechanics wont seem to get it flyable tho. Its taken all I have not to call HTC and ask them to look at adding some of the objects I have made. Just recently I finished a fixed position Flak 88 that many, including myself, would love to see in the game. I have come a long way in two months of really focusing on content creation.
Anyway, I like to write some more but I need to to get going to school. Have a 3,000 word technical paper I have to start writing, on a Saturday no less!