It IS better.
There's a lot of criticism of Oblivion for multiple reasons and yes, much of it is warranted. But the thing is....
For example, over on the Fallout forums, sometimes the "dinosaurs" will criticize Fallout 3 and call it a bad Fallout. Yes, maybe it is. But a bad game? No. For the most part, everyone can agree it's still a good, fun game to play, it just doesn't quite fit into the Fallout series (or does so rather awkwardly), offers many perks and strongpoints that are atypical for Fallout while neglecting previous strengths of the Fallout series, and while it doesn't exactly break canon or retcon, it does make some parts of canon incredibly sloppy and farfetched.
Oblivion is sorta the same, imo. It retcons, it was a disappointment compared to Morrowind....But it's still a good game. Oblivion has, imo, the best faction questlines of the series, as well as plenty to do, more dungeon (yes I'm willing to have this debate) and enemy diversity, more magic variety and better writing overall. It doesn't quite have the intense lore writing of Morrowind, but the little stories that go alongside the faction questlines or random quests are pretty good. By comparison, Skyrim's writing is abysmal, the faction quests are outrageously short, and the dungeons/enemies encountered can get really repetitive. To be perfectly honest, although I can respect Morrowind and see why it would perhaps deserve more praise and recognition, I think Oblivion is my PERSONAL favorite TES based on the faction questlines alone. Morrowind's factions were low on story, (more for quests with story being secondary), Skyrim's were just out-right derp, but Oblivion's were all very well done. For me, that matters a lot because faction quests offer a ton in regards to roleplaying different characters.