You wont easily get accurate soft shadows using an all models level, and thats not precalculated like blocks are... its all rendered in real time.
The shaders and dynamic lighting reguired for a decent all model level to compare to blocks is a frame killer too. You could create your own shadows on the model skins, but then you need seperate skins for floors walls etc ect which also take up a lot of resources.
I personally feel that blocks are still the way to go for indoor levels. Theyre great as the base level design, and from there you can add all your models for detail.
I think slow block levels are from the design aspect, not the engine. After all, as was stated, blocks were primarily used by older games for slower systems. It doesnt make sense that something that runs good on slower/older computers runs slower on faster computers

If you get the basic block level and lighting out of the way and all built, when you go to put in models and sprites, you dont have to rebuild the whole level, you only need to update your entities. And that part is super fast!
Models are faster than blocks, there is no doubt, but to make them look as good is a lot more work (shaders for instance). If youre making a DOOM3 clone however, models are the way to go.
Of course, youre limited still to 8 dynamic lights to work with, and its hard to light a decent level with only 8 lights per room or visble area... blocks have unlimited lights.
I'll buy the whole 'models-only levels' hype when we have enough lights for it and when any ordinary guy can implement shaders with ease.
Either way, if youre just starting out, learn with blocks first. theyre easy to work with.
Jason