By the time Bethesda would be ready to make such a game,
I think technology would have advanced so much that they could create big worlds and fill it with objects and everything so fast and easy, it would take just a few years
The thing would be to optimize the engine
so much that entire Tamriel could be created.
I think the biggest hardware obstacle to make all of Tamriel would be the AI, and thus the CPU time it consumes. All the terrain, LOD, physics...they could be calculated with the current system and current technologies (basically applying the general norm of "closer --> more detailed", while all the data that is far away from a certain distance simply wouldn't be processed), but AI needs to be constantly processed, even the one with the lowest detail. That'd take an enourmous amount of CPU time, not to talk about memory (although surely nothing that 12-16 gbs couldn't handle).
Once that AI / CPU issue is solved, the rest should be easy. It'd be all about intelligent cell management & purge.