I think there are a few reasons this would be a good idea, and since most of the reasons it'd be a bad idea have already been posted I'll focus on the good.
- You would not have to go through the hassle of setting up the game to play on DOSBox. This can be a very confusing process even using the instructions I've found here and on UESP.
- Some people might like to be able to play the games with a controller as opposed to keyboard/mouse (although it's possible there are ways to set up a gamepad either in-game or using an external key-mapping program-but again, it can be a bit of a hassle).
- Unless you're like me and have your computer hooked up directly to your TV screen, you can only play these games on your computer monitor. Granted, the graphics aren't that great so playing it on a larger screen would just "bring out the flaws more", but some people might like to play it on a larger screen nonetheless.
Also, should note it'd be HIGHLY unlikely that these games would cost $20, likely they'd be around $5 like other "classic" games like Doom on XBLA, or possibly $10 since they may be a bit more difficult to port over.
Do I personally think it'd be a good idea? Well, for me I probably wouldn't buy it because like I said I've got my computer hooked up to a TV screen so I can already play these games in my bedroom and on a descent-sized screen-I've also managed to finally set up Daggerfall but it was a bit of a pain to figure out. Also, as others have mentioned it would probably be difficult to do and it seems there are a number of unresolved bugs that might be considered less acceptable for a console release, and likely the process of porting would lead to yet more bugs that would need resolved. Also, aside from the last reason, all the reasons are simply based on a pure matter of convenience more or less, so really would it be worth it?
As for Morrowind, I could see it coming up on that X-Box Originals section maybe, although I'd like it even better if they threw in the PC version's higher resolution textures and maybe called it "remastered" or "enhanced" or something to account for the improved quality. lol