Even if a character doesn't a have a single line of dialogue, simply by having a name, it lends the illusion that that character is a "somebody" rather than merely a "something".
When an NPC is labeled "City X Resident", that NPC doesn't feel like a person, but rather just another fixture of the environment. You don't wonder about what "Resident 23" does in their spare time. You don't feel like that NPC leads a life of their own.
Giving dialogue to every NPC might be too much to ask, but simply giving them all a name shouldn't be. It's a small addition that would add character and believability to Skyrim - a definite improvement over Fallout 3's generic NPCs.