I can understand, you improve with experiance and people and companies progress in time. I don't know how to say it. Bethesda should be proud on what they did with Oblivon, but from what I read, it seems Oblvion was a disapointment for Bethesda to make. It seems they were not happy with Oblivion for what they could do at the time. That would be like Bethesda saying Arean and Daggerfall is crap because they can do so much better now.
Again, when I see Todd talk, it seems inbetween the lines, he wasn't happy with Oblivion.
I actually can see why Oblivion was a disappointment for them from modding the game. Oblivion, while working fine and well on the surface had several engine and coding problems that drew away a lot of very talented modders. Since I'm a graphical part expert I'll list the graphic part things:
1. Skeleton - character skeleton was not even symmetrical and obviously made... strange, probably to compensate for some kind of engine problem. Which interfered with animation and to lesser degree modeling.
2. Transparency - there was no way to force layer order expect for something done in Maya that resembled Voodoo practices more than modeling, and was only partially successful on complex shapes. The other way to stop textures from flickering ended up with rough edges on textures - no matter what you did your model and textures never looked good when utilizing multi level transparency. Which is a killer for clothing and hair design.
3. There where "remnants" of animated hair found in the game files that obviously even Bethesda couldn't force to work, so they had to settle for the bulky hair.
4. Rigging on character models required some other form of Voodoo to show up in character creation screen correctly.
And that is only form the graphical point of view - no matter what you did you banged your head in to some kind of limiter that felt like a mistake in programing or engine. Could draw anyone crazy. The obviously either had no time, or no tech to correct thous things, and just avoided them the best they could - by not rigging things on character (like hair) and making models that did not require transparency on more than one layer...
As I understand it similar issues where found in other parts as well - coding, scripting and so on.
I certainly hope that Skyrim woun't have as many mistakes - they had time to re wright any part of the engine that gave them trouble before, if they did it right than Skyrim will be a whole other story. But only if they did it right.