Todd didn't deny levitation. He was only joking around. It could still be in Skyrim.
It doesn't look likely to me. The way he worded the question sounded like a snarky way to say "no" to me, if it were in, he would say yes, after all, it's clear a certain segment of the fanbase wants it, so why not tell them what they want to hear? Unless doing so would be lying, of course, alternately, if it was in, but for some reason or another, they were not ready to talk about it, then he would have said "We're not ready to talk about that yet." or something vague that doesn't really answer the question like "What do you think?" or something, with the comment about DLC, what it sounds like to me is basically "no", just with a joke involved.
In a single player game I don't really see the point of not including something for "balance" I mean you can use it or not, so how would levitation be any worse than fast travel?
I'd argue that fast travel doesn't effect game balance at all, it just gives you a quicker way to get to places, it doesn't really make the game any easier in the sense that it allows you to kill enemies more quickly or give you more health or anything, and as fast travel works in Oblivion, you need to visit a location before traveling there, and based on what we've heard, Skyrim's system sounds the same, and if you've gone to a place once, chances are you can make it there again, and even if you say fast travel DOES have an impact on game balance, I'd argue that it balances itself out as when you fast travel somewhere, you miss out on things you might have otherwise seen on the way there, potentially losing an oportunity to find powerful items or something else useful. And really, if your going to use that argument, you might as well say Bethesda should add a spell that requires no skill to cast, has only one point of magicka cost, and instantly kills every enemy in the current cell while leaving friendly or neutral characters unharmed, regardless of how much health they have, after all, you can just not choose to use it, right?
And there are also people complaining about fast travel too, though not necessarily based on balance, so it's not like comparing it to fast travel will necessarily change anyone's mind.
Now, I'm not arguing against levitation, I'm simply saying that "It's a single player game, it doesn't need to be balanced" or comparing it to fast travel isn't really a good way to counter the arguments against it. I actually want levitation myself, I just don't feel that particular argument is a a persuasive one on the matter.
And in regards to the "Don't like it, don't use it." argument, that actually wouldn't work for levitation if it was done like in Morrowind, because in that game, there were certain places which required levitation to access, you might have liked this, or maybe you didn't, I did like it myself, but even those who did not would not have been able to just not use levitation.
In my case, I'm in favor of levitation, obviously, it's not something I start every game expecting to see, but having it allows for some creative environment design that just can't be done in a game where you're mostly bound to movement along a single plain, baring hills and stairs, of course. things like the Telvanni towers, the Ministry of Truth, or the many hidden alcoves with items on them only accessable by levitation in Morrowind's dungeons all couldn't be done in Oblivion, I guess for some of thse cases, you could also do teleporters like the ones that occassionally showed up in Oblivion towers, but it just doesn't quite feel the same when you're dealing with something that basically behaves like a cell transition door. And if cities truly are seamless, then they've removed the main justification for levitation not being in Oblivion. Now, Oblivion did have some places where using levitation could allow you to break the intended sequence for exploring places, but after exploring many Oblivion gates, I'd actually say being able to just levitate over the insurmountable barrers that tend to force you to use long, roundabout routes to get through them a good thing, even if some might call it "cheating", and if you really want to force people to follow a specific sequence for exploring areas, which seems to pretty much conflict with the premise of an open world game to me, then you can always keep the presence of levitation in mind when doing this and design things that still work with it, like say, don't have the lowest level of a dungeon have an alternate exit located in a place you can't walk to, but could easily be reached with levitation, as many dungeons in Oblivion did.
As far as supposed balance issues with levitation, if it had any problems in that regard in past games, they came from its implementation, which CAN be changed, you know. Mostly, the problem was the AI, since enemies didn't know what to do if you levitated to a place where they couldn't hit you, just make them respond more intelligently to the player levitating, and the problem is fixed, besides, it's not like Oblivion didn't have any unbalancing spells *cough* 100% chameleon *cough*, it seems pretty hypocritical to defend the choice to remove levitation using game balance and not even mention that.