After reading some of the replies here a quest from Oblivion popped back into my mind, it was during my characters induction quest into the thieves guild. I remember listening to my recruiter like a child all watery eyed with anticipation on Christmas eve, it was the quest where you were entrusted with stealing a personal item from some poor individual who must have crossed swords with the wrong folk. It ticked all the right boxes for an awesome quest, those being to break into the imperial city, finding one house among many, picking the locked door and searching its entire contents for one particular item without waking its inhabitants ALL against the clock in order to obtain the item prior to your fellow colleagues. Only to find the quest actually involved following a green indicator that lead me directly to the chaps house, told me which floor of the house the item it was on, and then it was kind enough to proclaim which draw it was in. The only thing it left out was what he likes to eat for breakfast and which colour of the rainbow he prefers.
It was like waking up on Christmas morning, rushing down the stairs only to find a bag of coal awaiting you and a note from santa informing you to behave better this year, it left me with numerous question marks floating above my head along with a sour face.
While I am inclined to prefer Morrowinds approach to finding specific locations and quest objectives, I do believe that both systems have merit. I particularly like the idea of a map marker to a static location, this technique would require the player to actually read or listen to the journal/NPC and would require some human ingenuity to get the job done.
Btw, if you're discussing the actual induction into the Thieves Guild quest, then you're completely wrong. In fact, you stated the opposite point of the one you should be making. In the quest where you have to steal the journal (and you're competing with other potential guild members) not only do you have a limited amount of in-game time, but you are directed to a general area of the city to find out for yourself where the target's house is from one of the beggars. Once they tell you the directions, you THEN got a quest marker showing where the house is based on the directions. Your other option is just aimlessly searching for the house or (possibly) just being lucky enough to have been to the house before and know where it is.
Point being, this quest is actually one of the very, very few in Oblivion that did NOT direct you immediately to the "GPS tracking device" on the item you're looking for. I don't know what version of the game you were playing, but I know from many playthroughs that this is how it went down each and every time.
Aside from that correction, which you can validate on the quest walkthrough on UESP, I would like to say that I would prefer a system that finds a happy medium between the Morrowind system and the Oblivion one, of course with some new ingenuity put into play for Skyrim.