Looking at how they act in Oblivion, it's no surprise that they're treated the way they are. They behave as nothing more than savage animals, with only enough intelligence to manipulate tools/weapons, and possibly even craft them as well. (How else could they have gotten those war-hammers?)
Shh! Just be glad that, of the various Arena enemies Bethesda has reinstated over the series, the http://www.uesp.net/wiki/Arena:Monsters#Lizard_Man never came back. :whisper:
You make it sound like they look unusually Humanoid in Oblivion, but that's only in comparison to Redguard and Morrowind. In Arena and Daggerfall they looked like humans with tails and funny skin colors.
The Argonian portrayals are purely artistic license, especially so considering that the first Elder Scrolls game was effectively an interactive medium for Bethesda's own little cliche'd DnD-esque tabletop. Interestingly enough, some aspects of Argonian visuals from the earlier games were later reinstated, for example, males and females always had specific eye colors in Arena, and in Morrowind they followed suit. Oblivion's Argonians I'm just going to blame on sheer developer laziness, although I would like to know why they've all become a hellish orange color.
The Khajiit, well, you can just be lazy and go with the moon cycle concept. Of course the problem here is that the Ohmes and even Ohmes-raht are supposedly meant to be the most common Khajiit outside of their home province. Makes sense, doesn't it? They look more like Bosmer than cats, the other races would find their appearance more appealing. Bethesda kind of contradicts this however with how the Khajiit in each game get progressively more animalistic - in Morrowind, fine, it's a frontier province full of slavers and smugglers and fugitives, but in Oblivion you'd expect most of the Khajiiti to be Ohmes diplomats or something of the sort.