From what we've seen of rage the biggest area is that small linear driving section. I'd hardly call that ready for a game like oblivion. Also I doubt the megatexture pipeline would work well for a game of Oblivions scale, unless you have 4000 artists. I wonder how easy it is to outsource art for a megatexture pipeline, lets not forget most games these days outsource shit tons of their assets.
A game of oblivions scale needs tons of copy paste and reuse - not amazingly detailed corridors and just as small dogleg'd cities. Lets not also forget theres a good chance they don't have the logic tools required to make an RPG game.
Don't get me wrong I'm looking forward to RAGE, but it's very much a FPS engine and toolset from what I've seen.