If it's nicely generated (which is very possible), trees, bushes and grass and such be placed just as "good" in the world as if they were handplaced. Or at least almost as good, but in much much less time. Time which can be spent making the world a bit bigger, for instance.
These things have come a long way since Oblivion. http://www.youtube.com/watch?v=r18c7QlWLBQ
I think the devs are really frowny on making the map bigger in general. at least thats the impression i got, they all ways try to come up with a trick or a justification to why the don't increase the map size.
I am not saying they're lazy, imo I think thay ignore map size because its not a feature of the game thats going to bring in more people opposed to what they do instead of making the map bigger, even though it allows the game to be even better than it would be other wise.