We have DaggerXL and OpenMW, so is there a program for recreating Oblivion's engine (or is one being planned)?

I pains me that Oblivion is so poorly optimized and inefficient on multicore systems. It also seems to perform worse when it's been fully updated. I have a copy of the original 1.0.0 release and it runs perfectly smooth. When I update the game to the last version with all the expansions however, it studders horribly and I need a few mods just to make it playable. What could Bethesda have done with those updates?

Unless Bethesda released the source code, there won't be any such project.

Bethesda supposedly lost Daggerfall's source code, and hasn't released Morrowind's. In fact I believe these are complete re-writes of the engines, and not based on source code at all.

Correct. Open MW is a new engine from the ground up. I don't know why modders could not do the same thing for Oblivion, other than the many years of work it would be. They have been working on Open MW for years.

Please someone do this!!!