The problem is that it WILL effect the way the game is designed. Specifically the loot and leveling systems. What is the point of Multiplayer, anyway? I really don't get it. TES has always been a single player game, a game where you hardly even have companions. Why change that? Why ask the developers to change their game to be multiplayer friendly?
A game like TES just doesn't make sense. You could do it in a turn-based RPG, where loot is automatically distributed, but in TES? You can't do that. There is a limited number of containers and enemies, and it would be first come first serve. And normally, when someone opens a menu, the game pauses. How could you possibly handle that situation reasonably?
Also, specifically for the PC version, and even for the console version, you have DLC and mods. If a player doesn't have a certain model or texture, then they wouldn't see their friend's custom weapons and whatnot. They'd be forced to download whatever it is in order to see everything as it is.
You'd have to turn the game into something COMPLETELY different than what it is, and there's just no good reason to do that.
Many of the arguments people are bringing up, dare I say MOST of the arguments, seem, to me at least, only applicable to MMOs. I'm sure what people are saying is directed at co-op, because I don't believe they are stupid, but I personally just don't see why it would be a problem. Then again, maybe it's ME who is on the wrong page. Who knows.
I don't see why loot would be a problem. If you are playing with one friend, and he takes an item you wanted, or he's taking ALL the items you want.. He's your friend right? Either get over it and move on, or just don't play with that person anymore.
As for mods, I guess that's semi-legitimate, but how many TES playing friends do you have? I only have 3, and I imagine most people don't have too many more, but would it really be that hard to go through your mod list and make sure you both have the same mods? If not you can download them and get on with it. It's not like you're playing with a randomly matched person, and you'd have to get new mods constantly to match up with each new person your playing with. But if you do have a lot of TES playing friends, this could indeed be a hassle. All I can suggest is only play with certain friends to avoid the hassle. I don't see why being able to play with only SOME friends is worse than playing with none at all. Especially when you can always take the time to match up your mods if you really want to.
For consoles, it's simpler but less flexible. Just have your friends get the DLC when you do. If not that, then there is hopefully a split screen mode.
As for opening menus, and lockpicking, and conversations, it would have to be real time, which is something I, and many others on this forum, want regardless of co-op or not.
And co-op would certainly not turn the game into something different. Again, that's definitely a problem with MMOs, or whatever, but playing co-op with friends does nothing to change the game into something else, IMO.
So perhaps I have oversimplified your points, or missed them entirely, but I don't see any real problems.