it's not about how much memory or work it would take
it's about the potentially game breaking problems that could cause in game
I drag a dozen trees to the side of a mountain and use them as stairs to get where I should be able to go
cut down trees to serve as obstructions for scripted running or paths.
also, the visual problems clear cutting the world might cause.
spawn points would no longer be shrouded in forests, things like that
Off course there are going to be logistical issues but they face challenges of that magnitude every single day. I was being optimistic based on it's potential. But I'll bite.
Don't drag trees. I couldn't drag an ogre without enough strength in Oblivion so this doesn't seem to be an issue. They fall, they maybe role but you don't carry them.
The possibility of an OPEN open-world brings back the possiblity of levitation so stacking logs is redundant to good world design.
AI driven NPC can get themselves over and around obstructions and if not... Well your trap worked, congradulations.
The visual problem becomes yours and yours alone. You did the crime, you wanted to commit the crime you spent that many hours cutting down that many trees to good for you. Enjoy your barren wasteland. I killed all the NPC in Oblivion once. All the ones I could find that COULD die. It was fun.