merrrrrrrrrrrrrrrr.... Just had to say it. If they remade morrowind with skyrims graphics then Bethesda would have a hunk of gold. And they know it.
Were that the case, there'd be no reason for gamesas not to do it; and you and I both know they wouldn't ignore an obvious way to make Big Bucks. Thing is, the market has changed over time. Morrowind was made primarily for the PC, with a port for the Xbox. Skyrim's been made primarily for the PS3 and Xbox, with a port to the PC. That's not to say this is a primary difference, but it hints at a shifting emphasis based on potential number of buyers, and buyer profiles. PC users are demographed as older, with different preferences in terms of kind of game they favor, input device, goals, expectations, etc. Probably just me, but I can't see Morrowind becoming a PS3 success. Can you imagine the number of complaints from PS3 users stating, "I got axes, and when I use one, it hits nothing, all the time! This game is broken!"
The change from a dice-rolled RPG to an FPS attack system is just one of the things gamesas's development team implemented over time (in this case, in Oblivion) to appeal to a different and presumably larger group of players.
Myself, I far prefer Morrowind, but I don't find it any better a game than Oblivion or Skyrim--just different. Each objectively has its flaws, and we may roll our eyes at the really devoted fan clones that write "reviews" of these games, but taken as a whole, each of the ES titles achieves what it sets out to do, and does it well.