you realy have to look at the TYPE of game you are making.

example, if i waned to make a Mario3D/Zelda3D, first person/3rd person shooter like game, especaily when thier outdoor enviroment areas are going to be very ridgedly designed for traffic/direction of play. blocks would be the way to go IMO for landscape

if I was making a game like an isometric view RTS or RPG then I'd go with terrains for exterior enviroments


also have to consider things like your poly count needs when making a game for your performance. like in a firest peerson shooter your view of actions going to be more up close and personal. translates over to needing more higher poly count models for better looking meshs. too offset that need yuo go with block level design which is then prebuilt reducing rendering needs on the enviroment leaving more for the mesh poly rendering.

an iso view RTS on the other hand you cna easily get away with allot of low polygon count models for entitys giving you the freedom to use that hmp mesh for terrains without a serious hit on the realtime rendering.