Maybe there's some simple explanation for this that I just missed, but is there any reason why Dremora in Morrowind turned to ash when you killed them and those in Oblivion did not?

:turtle:

I think in morrowind it was just an excuse to explain why you couldn't loot their armor. Or it was a case of dev laziness in oblivion (they still could've done it after all). But I can't think of any lore reason as to why they do it in morrowind.

I think it was supposed to visually represent their return to Oblivion (the place). Dremora in TES III were Creatures, not Humanoid, so looting their armor was not the issue. Had they not disappeared, you still wouldn't be able to loot their armor any more than you can loot a goblin's armor in TES IV. In TES IV, the vast majority of Dremora you meet are already IN Oblivion, though some are not.

Inferior material used to forge the Dremora?

I like to think of any lesser daedra in its own realm as being somewhat "liquid" and intangible and when summoned, it is forced to stay in a specific form, trapped inside its "body" like a prison. Necromancy is just becoming to complex and fudged at this point for me. I was fine with necromancers becoming liches and creating bonewalkers, skeletons, zombies, and things like that. But I just stopped thinking about how they could conjure them.

I don't think there is much of an explanation...
Maybe it has something to do with their daedric magicks... perhaps they don't melt in OB because there is no Divine magic holding them back, like the Oblivion portals, or something like that...

This could have been the case, if not for the fact that other Daedra types still just fall down even though they still work the same way, if it did, in fact, represent them returning to Oblivion, one would have to wonder why other types of Daedra don't get the same effect.

Ultimately, though, no explanation is offered in lore to my knowledge, whether for why Dremora did it in Morrowind or why they didn't in Oblivion, most likely, Bethesda just thought it would look better than just falling down, and in Oblivion they either decided it didn't work so well, or they just didn't want to bother.

I think maybe it has to do with how the lesser Daedra form their bodies from stray bits of creatia. Their daedric 'soul' and their will-power would form the creatia into whatever shape the daedroth required. When its soul is flung back into Oblivion, perhaps the creatia falls apart (with no guiding force to hold it together in any particular shape), and collects in what appears to be a pile of ashes.