I have filed a Jira report on this http://jira.secondlife.com/browse/VWR-4417 Please vote for it.
Sculpty LOD drops off at 4 meters making a objects distorted in a normal room environment. Detail is lost at an extremely close distance that makes sculptys unusable.
This is similar to the alpha texture opacity at small distances
http://jira.secondlife.com/browse/VWR-4417