Yes, because we really need the magical compass to tell us MORE things.
It's bad enough that it magically shows us where things are that we have never seen before, and shows us where NPCs are at all times, we now need it tell us what dungeons we've explored? Just let us draw on the map, problem solved.
The real problem is, we need a way to toggle off the compass/map markers that doesn't break the games. You can mod the compass off in Oblivion but then you can't complete any quests. Almost all quests have NPCs just say "I'll mark the dungeon on your map, then you go out!". Well if you have this disabled...you're in trouble. There's no way to find the dungeon now! NPCs don't give you directions like they did in Morrowind, you're out of luck. We need a good middle ground. Either give us directions and allow us to toggle off the compass, or circle the general area something is in and let us find it ourselves!
There is a difference in "Let me mark the dungeon on your map" and "Go to x cave" with no further direction.
When NPCs say "Let me mark this on your map" the little square with the cave symbol shows up on your map. This is equivalent to the NPC taking your PC's map and putting an x where the cave should be. This makes sense and I don't mind this.
When NPCs say "Go to x cave" and don't tell you where the cave is, but the magic green arrow shows up on your map showing you where it is, that doesn't make sense.
In my game, I've disabled the green arrow, not the square icon. If you've got both disabled, I can see where that could be a problem. In my experience with the particular mod that I use, NPCs either give good enough directions or mark the place on my map.