True alot of space would be taken off of some of the more hugley ginormous maps like arena and daggerfall. but something must be given to be gotten. sacrifices must bee made to convert such a large game into one disc for a console or pc with a better engine. Give some to get some.
Then again, I would hate if this happened. Sure, Daggerfall could perhaps be reduced to only the city-states of Daggerfall, Wayrest and Sentinel and possibly a few others. Same with dungeons - all but the main quest dungeons and a few others could be removed. But that would take away too much from the scope of the game.
One thing that I loved about Daggerfall was the sense of Tamriel's huge size.
Also, considering how the quest system works in that game, it is more or less necessary to have hundreds/thousands of locations to visit, or it would quickly turn too repetitive.
There are just too many things that would have to be remodeled from scratch to make it feasible.