Well, after playing a bit with Mount & Blade, I am pretty sure Daggerfall could be presented as a mod using that engine. I'd say more than half the work is already done for a team who is proficient in Python and with artistic talent also.
Check it all http://www.paradoxplaza.com/Mount&Blade/
Yeah, The first time I got on a horse in Mount & Blade and travelled around I immediately thought of Daggerfall, I can see where you're coming from. The only problem is the Daggerfall source code is supposed to be lost. Daggerfall doesn't really need a remake IMO, Its depth can outshine the old graphics. I would still like to see it attempted though, as long as nothing gets dumbed down.