To do some groping of my own, based solely on personal opinion and a bit of random hearsay, I do blame a lot of the gameplay problems with Morrowind and Oblivion on Ken Rolston. I think he was a driving force in creating a vision for Morrowind wherein an RPG is essentially an imagination enhancement tool instead of, you know, a game. Instead of "what tools am I going to use to solve the games' quests?" the idea became more like "I'm going to imagine I'm a ninja, and the game won't respond to me in any way whatsoever! Sweet!" Again, it's hard to say who's responsible for what, but from my view the "dumbing down" trend started seriously reversing with Fallout 3. People love to rag on Todd because he's the face of the series, but he's been with TES in a design capacity since Daggerfall, and his taste in RPGs is actually pretty dang solid. In fact, out of the five people credited as designers on Daggerfall -- Peterson, LeFay, Todd, Kurt, and Bruce Nesmith, three were integral in Fallout 3 and Skyrim, which for me have signified a definite return to form for Bethesda. So no, I don't consider the loss of Ken a bad thing. Nesmith doesn't get a lot of credit on these forums for some reason, but in light of my biased, Daggerfall-is-the-best-game POV, his return has been the best thing that's happened TES in ages.
I was going to stay out of this thread, but holy hell what the ef? Morrowind (or rather the Pocket Guide that shipped with Redguard) expanded the lore exponentially, both in scope and in depth. Morrowind and Redguard definitely changed the direction TES lore took, but you can't say that the lore became shallower in any way.
Certainly not, but I'm not even sure the lore ever "changed direction." It's actually always been a pretty natural evolution, building on things that came before. Arena to Daggerfall is still probably the biggest accumulation of new lore. Coming from Daggerfall and reading the first PGE back when it came out, it didn't feel like a sudden redefinition of everything I knew about TES, but rather an expansion that fit neatly with the lore I already knew. The same is true with Morrowind and Skyrim. There are things I like and things I don't like about where the lore has gone, but I don't think there's ever been a "hamburgers now eat people" moment.