Sorry, I missed that you said single quad.(I must need glasses) It would be nice to reduce the file size of each model down to that extreme low but is not very practical to start each model out a single plane. If we could, sure we would be able to load a very large amount of objects into a map but, you can over tessellate a object. When I say this I do not necessarily mean the whole object, but sections of that model. You would not be able to make human figure from a single cube because were the arms,legs,head would try to tessellate and extend out would create way to many small triangles in that area. For instance a tess factor of 3 will give you 13 triangles for every single triangle. So it can get out of hand quickly and I believe that the hardware likes each triangle to be at least 8 pixels.
If we could tessellate every object we can reduce memory greatly and which help speed things up a bit.
Would LE2 be any faster if you only had to load the lowest LOD?