Dark Elves frequently reffered to http://www.urbandictionary.com/define.php?term=dagoth+ur as the Devil.
Other than that, not really.
And Nords referred to the Chimer as devils. And the Imperials refer to the daedra as devils.
Probably the term originated as a description for the daedra, which have also been referred to as demons (On Oblivion), as they can be, but are not always, appropriately devilish. Really, it's a cultural thing.
Oblivion has been synoymous with Hell in the TES 'verse for nearly ten years now (see Redguard). Same with daedra/demons (see nearly any myth about daedra or evil gods-- more than likely, it'll be referred to as a 'demon').
They are not the same, but they are useful for context, and denizens of Tamriel freely use all of the terms all of the time. When, like, talking about hell or demons, which they usually don't do at night when Oblivion is staring right over their heads.
It has nothing to do with dumbing down anything. In fact, it has more to do with widening the scope of what those concepts and beings are to the people that live outside their realms.
No need for a four-alarm fire. Again. Read more lore, people. It's why it's there.
The Sermons addresses the nature of their evil:
'But then why, you ask, do the Daedra wish to meddle with the Aurbis? It is because they are the radical critique, essential as all martyrs. That some are more evil than others in not an illusion. Or rather, it is a necessary illusion