The Elder Scrolls series has always been recognized by an incredible fantasy-medieval setting and even tough the gameplay is nothing less than outstanding, the plot in the series are usually poorly written. The use of the lore, which is interesting and complex, is superficial, only to justify the presence of the story and nothing else. Politics are also an important part of Elders Scrolls and it's always been relegated to a secondary role. And going even further, the average story setting is mediocre, lacking deepness and involvement between the characters and the player.
I understand the main reasons for this are:
1) Philosophy: freedom is the main idea behind Bethesda Softworks, therefore the developers are more worried with a big open world than good crafted story;
2) Costs: bigger and more complex stories involve longer scripts, more voice acting, more gameplay time development, etc.
While the reasons are relevant not to make a good novel, the world lacks it's emotiong, it breath but doesn't live. To make a comparison, the Grand Theft Auto series evolved it's storytelling material immensely over the years. While GTA III had almost no story and Vice City was pathetic in it's attempt, San Andreas had a somewhat strong narrative and finally GTA IV brought a good written adventure.
In the same way, the Elder Scrolls's evolution was also strong, but solely on the gameplay and atmosphere side. Swordplay was carefully planned, magicka use in the last installment was a great advancement over the previous ones, conversations gained better environment, thieving improved a lot (but unfortunately it's still not that good), etc.
In this point it's safe to state that the game's narrative has followed the same script over the years:
1) Evil is coming, a chosen one must defeat him.
2) Speak to some people.
3) Go to some caves and forts.
4) Find the artifact you need to defeat them.
5) Slay the evil!
While this plot may be generally used to any roleplaying game, Elder Scrolls doesn't go beyond that point, deepening the subjects and making it more interesting. In another comparison, Mass Effect series really had an intricate adventure where races, politics and, finally, evil gave tune to the events in the game. The main set, to destroy the evil (in this case, the Reapers) was difficult not only because the evil was hugely overpowered, but because the relationship between the various races in the political sphere also broke the advancement to stop the evil. Furthermore, the background each race had, was carefully inserted in the context. For example, the race known as Quarian could not contribute to the fight against the reapers due to weapons shortage while in the Geth war. It's up to the player to find a way to solve the issue.
A good narrative, as I see, must be carefully crafted into the game's world in a way no to justify the existence of the story through the world, but to make the player believe that the world is a reflex of the story.
In that sense, I understand politics could really be so much more to the series. The plot in Skyrim had so many possibilities in that point, tensions between the altmer and the nords, war between the nords (Stormcloaks) and imperials, religious conflicts (Talos worship banning, daedra x aedra worship, etc), yet, none of these amazing topics were deepened. The conflict of interest were based uniquely on the external portion, leaving no margin to heterogeneity inside the regions. Every nord in Skyrim think the same way among altmer. Every citizen under imperial rule opposed Stormcloak rule and vice versa. The narrative didn't show any powerful noble trying to influence the conflicts, poor people didn't try to take control over it's city, the military had no "second idea" of what's better to the empire, etc, etc.
It can be seen, in this way, that the incredible aspects that gives flavor to the land almost doesn't interfere in the plot. It's only a reason for the player to go to a cavern/fort/city kill some people/creatures and bring/deliver some items to someone. In this aspect, speechcraft was and will always be a secondary skill, since it does not matter how good you are with words, they will never solve the outcome of an event, but your sword will. There's really no creativity in that. There are no dialog based quests which gives motion to the politics, and therefore, the game it's static. The efforts put into the game to make it look like a living world, are futile since there's no motion in the way things happens. If that seems a little too exaggerated, think about what changes before and after finishing any questline. The answer: Nothing. Nothing changes. No ordinary character turns into a noble, no priest is condenmed to death, no captain is glorified... nothing happens at all.
While the main reason for the weak narrative must be associated to the costs to produce these facts and events, I can only hope that the profits generated from Skyrim may incentive Bethesda to push it's boundaries even further.
PS: I'm not an English native speaker, if I have written some mistakes, please feel free to correct them.