Wait, wait, wait...
Matt (Lead Skyrim Artist):The armor system is very similar to Oblivion's. The main difference is that the upper and lower body armors, the cuirass and greaves, have been combined into one piece. This helps create armor styles that have the look we needed for Skyrim. In most of the Nordic designs we created, the upper armor would completely cover the lower armor, making it unnecessary. We get much better visual results combining those pieces, and it renders a lot faster too, so we can put more people on screen, so that was an easy tradeoff for us. We can also make a lot more armors now, so the number and variation types are more than we've ever had.
So I gave up my greaves and yet still...
Technically they did put more people on screen quite frequently. How many times did you go into battles with 16+ npcs present in Oblivion, Morrowind, etc? You didn't unless you modded it. Things like the final Oblivion Gate, and the Battle for Kvatch were the largest battles there were, and there less than 10 on screen at any given time. I'm not arguing against the OP, but comparing it to his street in real life is silly, and they did actually get more people on screen. I'm okay with most cities, but Solitude could use a bump. All cities could benefit from the holidays listed in the wiki, etc. But I can completely understand why it's not implemented. Some people's systems can't even run the game as it is. This could easily just be a happy medium. You can't max things out because not everyone can push that sort of thing.