How can Bethesda justify making Skyrim thousands of times smaller than it actually is in lore?
Space compression is a common tactic of developers. It's done because in actuality, Skyrim could not be hand-crafted AND to-scale. Reason being that the bigger the in-game map, the greater the content. More content means harder to make by hand, easier to make by random generation. To make Skyrim to-scale, would require Daggerfall to Dwarf Fortress levels of random generation. The only other option is to not give you an open-world, or use design tactics that simplify production.
Other option examples.
Option 1:
a. Dragon Age: Origins, note how you are only presented small portions of Denerim, the largest settlement you visit in game, and how you never get to explore the army camp, but only the Tower of Ishal, the field hospital, a camp by the ash warriors, the royal camp, a small training area, the Warden's camp, and the mages camp. (all right next to each other) at Ostagar. If it would be too big to reasonably design, they never showed you it.
Option 2:
a. Grand Theft Auto. Rather than use hand-placed NPC's, grand Theft Auto randomly generates a crowd to occupy the streets and gives them very basic behaviors. Prototype does this as well. So do most Grand theft auto clones.
b. The Sabetour, and all GTA clones, feature buildings you cannot enter. TES has, since morrowind, let you enter pretty much every building.