And next, all of the talent anybody cares about leaves the company?

[A Black Falcon]

Care to elaborate?

The scale and size of the overworld in Oblivion is about the same as Morrowind, in dramatic contrast to Daggerfall. That was the most obvious thing I could think of... I'd need to play Oblivion to say more. I know it had critics but I don't remember the specific points.

Well some of the simplification just comes from the move to 3D, such as the much smaller towns than Daggerfall you mention.

Um, DJ, all of the TES games are 3d... in fact, the only one that isn't first-person is TES Adventures: Redguard, and that's not a main-series TES game, as the name suggests... though Morrowind did add a third-person camera option, it wasn't too useful. The first two games are 3d first-person view only games.