Um, that *IS* what Daggerfall does. The only potential possible difference here is that, while ENTIRELY unknown, the RadiantStory quests could turn out to be "one-shot," vs. the "repeatable" nature of Daggerfall's quests. DF's 'random' quests were fully written, with it merely selecting randomized "objectives." As an example, in the http://www.uesp.net/wiki/Daggerfall:Banish_Daedra quest, you ALWAYS must go to a dungeon, and it's ALWAYS a frost daedra, and you ALWAYS cast the exact same spell. The variance is the dungeon/location within the daedra will be, the "name" of the daedra, (pulled off of a randomized list, not unlike many NPC names) and, of course, the reward; it's ALWAYS a book, but it's selected at random. (which could be done in Oblivion simply by making the quest reward be a "leveled/random item" instead of a direct item reference)
Yes, you are correct, that is essentially what Daggerfall does. My point is that in essence, Daggerfall has no set sidequests (that I can recall). All sidequests are completely randomly chosen from a list of templates, assigning them to various people with non-specific roles, completely randomly (most quests are just fetch or kill quests).
Radiant Story, however, doesn't appear to draw from a list of arbitrary templates. Instead, Radiant Story draws from a list of actual quests, tailors specific elements to your character, and then gives you the quest. It's not a random-quest generator like Daggerfall- it's a quest making tool. It actually sounds to me like ALL quests are made in Radiant Story, even the very very specific and hardcoded ones.
Daggerfall throws a random quest at you- Radiant Story examines you, determines the individually designed and unique quest for which you'd be most appropriate, determines a few variables (questgiver, destination, etc.), then gives it to you. There are no random templates that it has- it has a set number of quests, most of which appear to need certain conditions.
For example, with your Banish quest, the quest generator randomly selects that template, chooses the dungeon, a random name, and gives you the quest. Radiant Story would ask "is the player suited for this quest?", "where is the nearest dungeon that the player hasn't visited", "let's populate that dungeon with appropriate monsters", "put the Atronach in a very specific place and tailor it to the player's level". Once the player completes that quest, it's done. It will never come back. There are tons of times in Daggerfall I seem to remember getting the exact same quest.
In other words, you WILL run out of quests eventually. But each one of those quests is uniquely handcrafted, not just grabbed from a list of templates.
One thing about this that does excite me is the possibility that you'll now be able to receive quests from EVERY guildhall. Take Oblivion for example. In the Fighters Guild, you only recieved quests from three people- the Orc in Cheydinhal, the Redguard in Anvil, or Oreyn in Chorrol. Now, maybe each guildhall will have a specific list of quests for that individual guildhall, but there will be a list of generic quests that can be received anywhere. Similar to Daggerfall, but also similar to Oblivion. A step beyond Daggerfall, if you will.