I disagree with that completely. One of the great things that separates RPGs from action games is the ability to fail, flee, and come back when you're stronger. If you want to be able to fight and beat everything the moment you encounter it you're stuck in the action game mentality.
Plus there's no such thing as self improvement when the world levels with you. If you're doing it just for the personal joy of hearing the "level up" noise, then you're just deranged.
I had to think back a few years to remember an RPG where I would often fail, flee, and come back later, and remembered that it makes both leveling and exploring much more enjoyable. Regardless of how fun it is, I still can't agree that that experience is the sole purpose to leveling.
Depending on the choices you make while playing your character in Oblivion, you can run into the leveling problem that has been a rather big topic over the years. If your choices have left you relatively weak compared to your enemies, then you run into the situation you are describing where you have to flee and come back later. Only further leveling will help you catch up (I use leveling loosely here to refer to raising skills and to raising actual levels to improve your attributes).
If it's a good number, how come I only met one.... once ever. An obscure white troll hidden up in the north corner of the map. Every fight, no matter what I fought, was the same 10 minute long mini-game of swing, block, swing, block. I was ALWAYS able to stand up to a mountain lion.
If you mean only that there are no enemies that can give you a serious kicking and that make you have to flee and come back later after leveling up some more, then I think more such creatures are available depending on how you develop your character. Quite a few players have characters that can't stand up to a mountain lion the first few times they encounter one. If however, you mean that a white troll was the only creature you met that didn't level up with you, then you weren't paying attention. Not counting the ever-scaling NPC's, there are only ogres, minotaur lords, goblin shamans, goblin warlords, gloom wraiths, liches, and xivilai as the entire complement of creatures who level up as you do. Everything else -- rats, mud crabs, bears, storm atronachs, spider daedra, and more -- are static.
You don't have to dance around/ hit then run. Every RPG let's you do that, and it's totally your choice if you want to be lame and exploit the combat system that way.
I'm not talking about exploiting the combat system in Morrowind; I am talking about using it the way it is meant to be used. Some weapons have a longer reach than others -- take advantage of that reach and keep out of your enemy's range. Some weapons allow more frequent attacks than others -- move in close and take advantage of that speed. A claymore is going to do more damage with a slash than with a thrust, so move sideways while attacking rather than forward or backward. A big two-handed weapon has a slower attack rate -- take advantage of an enemy using such a weapon by moving in, striking, and moving out between his swings. As far as style of combat goes, Morrowind and Oblivion are practically identical.
real point is:
Oblivion's combat takes the skill of the character completely out of the equation, (and since everything's your level) you don't have to level to prepare for anything. With Morrowind, the challenge is preparing for the fight. In Oblivion, the challenge is just enduring the long, boring, repetitive fight.
In other words, in Morrowind I found the challenge in figuring out how to kill this guy who is way above my level with the enchanted items I happen to have in my inventory for emergencies. The challenge was also is searching places out, collecting the right buffers to convince people, leveling up to advance in my guild sneaking through then escaping the overpowered dungeon. In Oblivion, the challenge, for me, was literally to put up with the constant, mind-numbing fighting long enough to just see how the stupid story ends.
I do notice the impact of my character's skills, levels, and attributes in combat in Oblivion. I won't defend Oblivion's scaling system, which in principle functions like that annoying grammar and spelling checking in MS Word.
Did I mention the biggest problem is that there's way too much of it? And literally nothing else to do unless you want to make some poisons. When there's nothing to do but fight and the fighting is based on the reflexes of the player, then it's an action game, duh.
But for some minor exceptions, everything there is to do in Morrowind there is to do in Oblivion, even if you personally dislike how either game handles things. In both Morrowind and Oblivion, the objective is to play a role. Combat is present only to make playing a role more fun; it is not the objective. Combat is aim-click, aim-click, aim-click in both games (Well, okay, blocking in Oblivion provides the periodic aim-click, aim-click, uh-oh-click). Morrowind introduces a character-skill-based probability to its clicks so that some clicks result in no damage to the enemy, yet the player does the exact same thing as he does in Oblivion. As far as I can see, there is no sound basis for categorizing one game as action and the other as something else