It'd be extremely difficult to create a co-op system that would work for the Elder Scrolls. Consider the main quest, should there be four dovakhiin wandering around? Should it just be companions with the main character (host)? Okay, what do the companions get out of it? What level do they drop in as? And as for the arena concept, it'd still take a ton of time develop and put in place. Then of course you have the problem with PC users: what about mods? Is it fair that this character has a set of god armor they got in a mod? Going back to the co-op idea, what if the host has a new texture from a mod one of the other users doesn't have?
There are just too many problems to be worked out for multi-player to be added to this game. While I'm confident gamesas could solve all of them and create a working system, I fear they'd have to sacrifice so much from the main game that it's not worth it. In this case, the additional benefits are outweighed by the additional costs.
Maybe at some point we'll get an Elder Scrolls title with some form of multi-player, but not with Skyrim.