That being said, Morrowind didn't do a whole lot about it gameplay-wise. Dwemer artifacts and Ebony armour weren't contraband. It would have been interesting if it were necessary to unequip all your Dwemer and Ebony armour before heading into town, for fear of getting arrested.
Interesting? Yeah, probably. svck @$$, most definitely. Dude, it'd be cool at first for the added realism, but (just like the fatigue system in MW) would get woefully tedious after about 10 minutes of play. Now, I can fix the fatigue system. I just enchant something early on, but what am I to do about the armor short of making a chameleon artifact or something? Not cool.