Bethesda's Shivering Isles and it's jittering madness drives saves over the edge.

[A Black Falcon]

Yes, you could fast-travel to any area that you've been to once before.

Right. So then what were you complaining about? Oblivion fixed the problem. You don't need to be able to warp everywhere, just to the towns or dungeons or major points like that...

Eww...

One of the big complaints about the game was how similar a lot of content felt. Still, the game was ridiculously large in size, much more so than Morrowind or Oblivion, so for the "this is actually the scale of a real place" factor, Daggerfall wins handily and Arena doesn't look too bad either. Morrowind didn't feel like that. Not with towns being separated with mere minutes of walking and being relatively small in size... the "big" towns in Morrowind are tiny compared to the towns in the first two games.

Of course, if Morrowind had had the scale of the first two games with no warping, it'd have been utterly awful, so if they wanted to have you walk everywhere, they had to do what they did. Though I suspect that it has a lot more to do with the facts that they wanted to design the whole overworld and not use random generation (so it would take a lot longer to make the overworld as large), and needed to make it something closer to a scale a console RPG gamer would like.