I need a larger sample size to draw definitive conclusions on what's up with the Texture Quality setting, but from what I can see I think it's merely a texture cache to minimize pop-in.
Yeah, it looks like an "ubersampling" type setting for people with MONSTER rigs to turn on just for overkill. A little texture pop in here or there isn't going to kill anyone, imo, and certainly won't send me in here crying about a bad port because there's a full load in option for people who have the crazy hardware to use it, either now or in the future.
They probably should have made it a command line option, though, because most people don't understand sliders and will be in here bitching because they can't "max" the game =\