Illegal. See: Morroblivion.
Not the best example. Morroblivion was hit because it directly ported Morrowind resources over to Oblivion, which is 100% illegal.
Should somebody wish to hand-model every single model, re-write every piece of dialogue, re-record every piece of voice acting, etc, wish to do it, there is certainly legal precedent that it is allowed. There are dozens of "Morrowind in Oblivion" mods or even a few "Oblivion in Morrowind" mods that are perfectly legal, because every single thing in the game is either from the game the mod is set in (in other words, using Cheydinhal architecture in Seyda Neen or something similar, as TlOvSm or some similar name does) or painstakingly remade from scratch (such as hand-modeling an exact replica of a Redoran hut to use in Oblivion, as Silgrad Tower and Phitt's Sheogorad project work).
Still, it is a lot of work. Unless you're completely willing to pretty much reuse Skyrim assets for EVERYTHING, you'd need modelers, texturers, voice actors. You'd need a full design and art team, though you'd be able to get by without the programmers.