Well as you may or may not have known, Arena was originally slated to be a gladiator-style game where you and your teammates would travel all across Tamriel, fighting in competitions across various cities and provinces before going to the Imperial City to fight in a championship tournament. This was later condensed down to a party-based RPG and then the single-player RPG we all know and love (and loathe starting dungeons for) today. Fun fact - you can actually see http://www.imperial-library.info/content/elder-scrolls-arena of Arena during its party RPG phase here on the Imperial Library. In some ways, the game seemed to be far more colorful and populous with NPCs then than it was now. But Arena's still a great game to play now and then, when you're too tired for the dungeons of Daggerfall and Morrowind/Oblivion have been crashing on you.
Anyway, this alternate release timeline of yours would probably have been radically different from our own. Think about it. You can argue that Daggerfall was an overly ambitious game, a massive epic open-ended world that was meant to be infinitely replayable in the amount of quests and factions there were to interact with. The game itself still holds up amazingly today, with it still being my personal favorite
vanilla TES game. But what if Bethesda were a more mature company when they undertook this awesome project, and had better technology and more manpower? I'm getting this vibe that the question the OP posed was what things would be like if Bethesda literally released their older games as-is in the present day, like the TES: Arena we know in 2011. That would be boring. So instead, here's my take: what if each game was "remade" in keeping with the technology at the time?
Skyrim/Morrowind/Oblivion would have been smaller, less ambitious (but detailed nonetheless) DOS games designed for Bethesda to first test the world of Tamriel and their RPG model. But they'd later attempt a huge procedurally generated world: Daggerfall, and this time they would have possibly have had the expertise to meet all of the game's promises and brought about an even greater level of detail still. The ever-excitable Todd Howard would decide, in this parallel universe, that quantity was more impressive than quality and then Bethesda would tackle the whole of Tamriel in a procedural game, The Elder Scrolls: Arena IN 2011! THEY'D BE IN OVER THEIR HEADS!
It'd inevitably...flop...and then Bethesda...would continue making SOULLESS MOUNT & BLADE SANDBOX GAMES!
Without their much beloved (though oft-criticised) "reinvent the wheel" mantra they've been using since Morrowind...it'd...be...they'd...ugh...no...NO!I can't go on! Please! What a nightmare! :ahhh: