Personally, I'd love for there to be a magic pack system. Standard bags, magic bags and even epic bags that allow you to magically carry more.
A bit along the lines of dimensional pockets in d&d games.
So, basically you'd either buy different kinds of bags, or if lucky find some.
At the beginning of the game you won't be able to carry much beyond what you wear, but as you progress and find better bags you'll be able to carry more and more.
This would be more realistic. Well, as far as you can consider magic to be realistic. Otherwise I'm imagining me as a scrawny thief that silently walks out of a house with 200+ lbs in metallic items he is somehow able to drag behind him.
So, when I say realistic I meant it as in realistic in the way of a fantasy setting with lots of magic all around us.
Edit:
For a somewhat better explanation. I do not mean bag of holdings where you can have thousands of items which weigh nothing.
The bags might give you some reduction in weight (whether they do or not I don't care too much), but nothing major. So it would still be dependent on your strength.
The difference would be the amount (size wise) of items you could carry. Even a Nord with enough strength to carry 1000 lbs of stuff would struggle finding room for 20 heavy armour suits and a load of swords and other random stuff.