These tiles are simply an attempt to address one of the flaws of modding Morrowind. I could list a million reasons why someone might need to build interior cells that look like exteriors. You posted in shannon's city mod thread, its all interior cells BTW. He made these tiles to go along with it, in case the time comes when he needs them. Obviously you judge this resource only by the screenshots and never actually took the time to look at it in game. It is not perfect by any means, but it doesnt look terrible either. (just like MW landscaping!) Try making a forest that dense with 3d models in an exterior cell, see how far you get. Sometimes sacrifices must be made, either in realism or framerate.
Also, these particular skyboxes dont cover up the skies. They are mountainous backdrops through which the skies show through. Like Melchior Dahrk said, they are simply atmospheric. Shannon also made some true skyboxes which would be handy in making dream worlds or Oblivion planes. We all try our best to work within our abilities and the limitations of the engine. Forgive us for stepping outside the box.
Sorry I didn't mean to sound like I was bashing this atall. I didn't realise it was meant as a resource. And yeah Shannon's City Mod looks pretty damn cool, and I know that's all in interior cells, and i know why its all in interior cells. And I didn't mean to say it looked terrible, although, I really, really, don't like skyboxes atall, but each to his own.
And as for making a forest with dense amounts of models, My http://i319.photobucket.com/albums/mm449/DDevilMonkey_666/SKYRIM/Morrowind2009-11-0600-51-07-95.jpg is almost completely covered with dense forests, with the complete cells containing on average about 600-800 statics.