Unless you're in Black Marsh or Elsweyr, you aren't going to see much of the Argonian or Khajiit culture. You saw more ethnicity among them in Morrowind because many of them were brought over from their respective provinces as slaves. This is not the case in Cyrodiil, where many were probably born and raised in the province. In the case of Cyrodiil, the vast majority of the Argonians and Khajiit have been assimilated into Imperial culture (the same goes for the other races as well -- it's safe to assume that the distinct races would be most homogenized in Cyrodiil, which I honestly see as Tamriel's "melting pot") . The same is true in Morrowind, just to a much lesser extent. This sort of thing happens in "real life" too. In a "melting pot" region such as America, for example, ethnic cultures are naturally far more diluted and assimilated into American culture as opposed to how it'd be in their home country.
I also find it peculiar how you complain about the beast races being too silly in TES and should be changed or removed but show no interest in actually LEARNING about the races in the lore. If you have no interest in learning about them, I fail to see why you even care so much, or really at all.
A wonderful thing about The Elder Scrolls is that it takes tired, cliche fantasy tropes and turns them around and makes them fresh and interesting and unique. Take some time to learn about the different races, especially Argonians and Khajiit, and you'll see just how original they actually are. However, if you have no interest in the lore of TES, then this is the wrong video game series for you, because the lore is part of what makes up the greater part of TES's charm and appeal.
Also, while it would certainly be nice to see every aspect of the lore in TES games, one needs to be reasonable. The games are already massive as they are, and like any video game company, Bethesda doesn't have limitless resources nor limitless technology. There is no way Bethesda would have been able to include every variety of khajiit, argonian, human, or what have you in either Oblivion or Morrowind. It's just not feasible. The overall games themselves would have suffered greatly as a result, seeing as how resources would have been pooled into the quantity of races and probably not much else, such as story, gameplay, the world, etc. Not to mention such a thing, at this point in time, would be too difficult and costly to realize with today's technology. Take a moment to learn about the restraints of game mechanics.
I second this post.
I always sort of saw Cyrodiil as the melting pot as well. Thats sort of how I justified the drastic change between dark elves from morrowind, and dark elves in Cyrodiil was that the Cyrodiil dark elves were much more imperialized. Geographically speaking, Vardenfel (I know I spelled that wrong. >.<) was less civilized than mainland morrowind, and mainland morrowind was still isolated from Cyrodiil through a mountain range.
Further more, the beast races have been with us since TES 1. To just say "I don't like them, get rid of them" really doesn't do much justice. Sure, you could think of them as silly or stupid, or whatever. Thats your opinion, and your entitled to feel that way regardless of our differing opinions. But they've been here a long time now, and they're only going to stay longer.
Now I'll be honest. I haven't actually ever had a kajiit character since daggerfall, and my only Argonian characters were in daggerfall and Morrowind. (Mostly stick to the human races, like the bretons, nords, and redguards), but at the same time I've actually NEVER played an elf character at all in the Elderscrolls games. Never been to much of a fan. But at the very least I understand their significance to the world of Tamriel. They are as much apart of the world as any other race, and Nirn wouldn't be the same without them. Creative or unoriginal, silly or serious... Who really gives a damn anyways?