Even with oblivion there is precious little replay value especially as character builds are limited.
I'm going to turn some of what you said upside down to refute that. I hope you don't mind.
Most of the skills are worthless which means there is no point selecting them as major skills.
The point of making something a major skill in Oblivion is to manage level advancement, and to give the character a "push" in the right direction. As you pointed out with your "ideal battlemage," the choice of a major skill can facilitate reaching a level where a skill is no longer "worthless." Your choice of Armorer is a good example of this.
Thus...
Security instead of alteration makes no sense, when alteration does what security does and so much more (especially with the skeleton key).
Unlocking spells don't work underwater. Spells to unlock Hard or Very Hard locks require a high Alteration skill, whereas lockpicks will work for anybody. Also, Security advances very quickly with use, so a Thief build who starts with high security can get very advanced, very quickly. Just a thought on the "other side..."
Illusion is better than speech craft as well.
Well, Illusion is better than anything, and a master illusionist can completely break the game, to the point where you barely need any other skills at all.
-Blade (blunt is inferior, less weapons, slower attack speeds)
On the other hand, several fine one-hand blunts can be picked up in the course of doing other things. Not everybody's choice, of course, but Calliban's Grim Retort is a wonderful weapon for the wandering Nord Barbarian.
-Heavy armor (easier to find, breaks less, also better artifacts)_
Heavier, provides no more protection at high skill level...
Everything else can be replaced either by magic or isnt that important. Like Acrobatics...ive never encountered a situation where i thought "damn, i really wish i had higher acrobatics now"
Different strokes, and all that. In recent times, most of my characters have had Acrobatics as a major. It's incredibly valuable to be able to jump up onto high places, especially if you're a relatively weak character and something big is chasing you.
With morrowind i remember having a LOT more choices...especially with minor skills and armor choices.
It did. One of the common threads running through these discussions is the gradual "cutting" of content, from one game to the next.