You know, you need to factor a few unmentioned things in vis-a-vis soundtracking:
(1) In the pre-Morrowind games, they used MIDI, and the HMI audio interface, which let them assign a midi or a small group of midi's to specific action triggers. Hence you get things like the two snow themes, one of gentle, falling flakes, and one of brassy, riding across the white lands at a gallop. All the MIDI files extracted added up to all of 1.95 megabytes; what, a fraction of -one- mp3? They had the room for all the thematic music.
(2) With MIDI, a good part of how it sounded depended on exactly what card the user had, or if the later cards, what soundfont they used. The basic 'everyone has this on there somewhere' instruments sounded terrible; as in performed by the Kazoo and Tin Can Orchestra. Put a good card, or a proper orchestral soundfont in the mix, and.......... Mmmmmm......
(3) Morrowind, which was the start of the MP3 era, =did not have the kind of music assignment engine that earlier games did=. You never really knew what theme you were going to get....and the composer had to take that into consideration, as too much variation in thematic structure could and would destroy the immersion in the game world. As those who did mp3 recordings of Daggerfall's soundtracks to use im Morrowind learned when suddenly, in the midst of danger...you were listening to the tavern theme set.
(4) MP3's are -not- friendly to wide ranged musical scoring. The compression kills both upper and lower dynamic registers. Here's a test. Get the soundtrack CD from Conan the Barbarian (and I would =love= for Basil Poledouris to do a TES soundtrack....). Take the Anvil of Crom track, and convert it to MP3. Now listen to each source. The higher instruments are duller, the peaks clipped off, and the bass and percussion, while still very much there, are also a bit stuffed with tissue paper. And it is those deformed, compressed parts of the musical score that typically are the parts that trip emotional spikes. You hit a kettle drum; it isn't the 'thump!' that really gets to you (that more or less gets your attention); it's the sounds as it dies away. The dynamic range heard in Soule's music ingame is =not= the range you hear in the uncompressed versions. And if you know your work is going to get muted, it kind of affects how you do your work to begin with.
(5) Another reason the MIDI's had much better impact is that they didn't have the limits of MP3's; namely you didn't have to end the music, have a brief mute period, then restart at the beginning (unless, of course you hack the mp3 format, which has this set up by default). You could drop right back into a MIDI anywhere you chose and loop unto eternity (in the renamed 'winter2.hmi', you started off with a nice intro and theme for 46 bars, did a little 5 bar bridge at the end, then dropped right back into the beginning at bar 2, bypassing the wind up and sounding as if the musicians just kept playing, not rewinding). In a lot of ways, the mp3 music format is stifling to composers, as you have to deal with start,-theme-end-pause-replay, instead of start-theme-bridge back to matching beat near beginning-continue. And a ham handed encoding engineer can utterly destroy a theme's uniqueness with a fraction of a percent too much compression.
Frankly, I'd love a return to Daggerfall style music control. So the Ipod generation couldn't snag the themes; big deal. The composers could expand the number of themes and cuts they created, tailor them for their intended environment. And sound on computer systems is more than capable of multitracking (say a base MIDI theme; later, at a critical juncture, same theme with added voices, building the tension. You could have several of those additions to the base theme, from higher and brassier instruments to descending choral, depending on the needed environment). You have to factor in whether the game mechanics help or hamper the composer, and like it or not, the mp3 era hinders
For that matter, you could always run two sound engines, leaving the mp3 scores for the epic, dramatic sweeps and using MIDI to generate the ambient music that is in taverns and homes and repetetive dungeons.....