Even ignoring the part where fantasy & game worlds tend to have very slow development speeds, if any...
...it's been 200 years of stuff going wrong, as far as I was aware. Empire's going down hill, Morrowind exploded, civil war in Skyrim, etc. That's usually a recipe for a tumble into the dark ages, not technological improvement.
![Smile :)](http://gamesas.com/images/smilies/icon_e_smile.gif)
(I also suspect, from my lofty position of very little lore knowledge, that there's some anti-tech prejudice in the world, due to the Dwemer.)
edit: also, with Magic available to do a variety of things, there's less necessity to come up with mechanical/industrial ways to do things. For instance, easy access to magical healing means there's less need to figure out all the surgery/etc that we eventually stumbled our way onto.