Now that you mention it, it seems terribly obvious. The guy had like 999 hit points so yes, some bandits couldn't really bother him. But still, I'm a little paranoid these days...
Some guy posted a demo of OB during the E3 in 2005 and there were lots of nice things that finally were cut, so who knows.
I totally understand people are anxious about features being left out at the expense of the game itself, but you really think
blocking is going to get the axe? Oblivion had things taken out because the game wasn't stable with them in... i highly doubt blocking with two weapons constitutes as making the game unstable lol.
the way i see it is, this game isn't doing anything remarkable, or groundbreaking, so the chances of things getting taken out because the game isn't ready for them is very slim. I'm more worried about what they might not put in altogether (were-creatures, two-spell combinations, enchanting arrows, ect.). I think it's safe to assume a dual wielding parry is a logical addition to the game that's focus is fighting things.