I've never understood this argument. If the spell coders spend time on one thing, the creature texturers will magically produce shoddier work, etc. It's not like levitationwas particularly difficult to implement in Morrowind or Daggerfall. Hell, in Daggerfall they had passwall, an ability they seemed to forget how to do in only 17 years.
That bizarre argument does have some merit in this case however. If we are allowed to fly, dungeon designers have to work around that in their fundamental designs. A good deal of traps become nigh useless, various trigger zones need to be re-sized to accommodate flight. We would need to adjust spawn patterns or skills and inventoried to allow NPCs some way to deal with PC flight. Levitation throws a lot of things out of balance and when used as defense, comes off as being quite gamey. At least, levitation as we knew it does.
I would like to see levitation return as actual levitation rather than flight. Allowing you to rise into the air, but not taking you outside of melee range. Something that you can cross a chasm or avoid a trap with, but not use to fly up to the top of High Hrothgar. Perhaps even make you move more slowly so while you could float over a spike pit, those swinging blade traps would present you with a problem.
Also, Passwall was lost between Arena and Daggerfall. Daggerfall has a void you would fall into much like Morrowind and Oblivion if you went through walls. No one seems to mourn the loss of that spell though. Probably because it trivialized a good portion of Arena