The thing is that Daggerfall and Morrowind put you in a larger, more complex world, where there were political conflicts and divine powers that existed beyond your control. You didn't always know what was going on in the world, but you knew there were things going on, forming a larger picture of society and politics in the region. There was an incentive to explore, and, especially with Daggerfall, the games are primarily a visual aid to help you see the influence of your actions upon the world. The Elder Scrolls games always gave off a,
"here's an interesting setting and some background events, go wild" sort of vibe. Oblivion just felt like it was being shoved down your throat in every way.
Granted, I liked the traps, the Radiant AI (a step up from Morrowind's predictable NPCs and even LCV's "poofing" characters), and even the lockpick minigame. Just think for a moment, there. We toss out/merge a bunch of skills, severely reduce the number of factions and level-scale pretty much everything in the game. In exchange, we get traps, Radiant AI, and a lockpick minigame.
Now let's look back on how Daggerfall players felt about Morrowind. I myself only rediscovered the series a few years ago, but I'm certain there were some people who found Morrowind too "dumbed-down" from Daggerfall. Yes, we lost factions, skills, and sometimes I'd even say the randomly generated mad-lib quests were missed (they were a good way to kill time). In exchange, however, players got a contained, persistent, aesthetically and culturally beautiful hand-crafted world. Every detail was placed lovingly by a developer, and there is always an incentive to explore. Easter eggs galore, unique items, hidden dungeons, memorable NPCs. Oh, and the Construction Set. Overall, it was definitely a fair trade.
Compare this to the tradeoff when transitioning from Morrowind to Oblivion, you will see why, from a gameplay standpoint, it is frowned upon.
On the subject of lore, I read an old post by bg2408 who made the point that whereas much of Morrowind's lore came from books, a lot of Oblivion's lore came from comments from NPC's, so Oblivion's lore was very much a "this is what is happening in the world right now" scenario.
Arena defined the world of Tamriel and the races. Daggerfall defined the Aedra/Daedra, the factions, and some of the politics. Battlespire defined magic to some extent and more Daedra. Redguard defined the Imperials and Tiber Septim's conquest. Morrowind defined the Dunmer and the Metaphysical. Oblivion defined the boycotting of Imperial goods. The only thing I found remotely interesting was the revisiting of old Akaviri sites, such as Pale Pass.
I mean Morrowinds combat was stab - miss, stab - miss, slash - miss, you have been hit for 72 damage, alt f4 play pokemon instead. Atleast in Oblivion there's some skill involved. This is the case with most things, a lot was "dumbed down" in a way and some of us liked it, some didn't
Whose skill? What skill? Your button mashing skill? Or the character's upbringing and martial skill?