Whether or not its a DLC, its come down its an expansion. The rest of the DLC are just small, or glorified mods.
So because it adds a large amount of content in one package, it's considered to outclass the DLCs being released for Fallout 3? I think that's turning a blind eye to the fact that in despite all the SI adds, it's still a "glorified mod" that shares more or less the same level of problems each Fallout 3 mod has had in some way, shape, or form. Heck, Shivering Isles can be considered non-canon simply for the fact that you turn into a demigod in the end, yet still can be killed by a rat.
How about using a different reference to judge if something is an expansion or not? Adding a new worldspace, providing more quests, creating new items to use, etc. is all in the Fallout 3 DLCs thus far, including the upcoming Mothership Zeta mod. Soooo if SI is canon, so should a mod about an Alien invasion :> How about using this to judge if something is canon or not: If the developers of the series deem it so or not. So.... heck, why not bring it up on Interplay's forum?
And as far as I'm concerned, Shivering Isles is more or less a giant glorified DLC mod. It adds a ton, much of which is enjoyed, however it really isn't much of an Expansion, same goes for Bloodmoon and Tribunal. All it adds is a sidequest that doesn't have anything to do with Oblivion's main plot. I mean, Broken Steel can be considered more of an expansion considering the fact that it continues the original story of Fallout 3.