First of all DAMIT DAMIT DAMIT
What's wrong with a algorithm generated world? You get a large, nice looking world without having to spend extra months hang building the world. Daggerfall was also generated and it's the biggest game world ever created and I thought it had plenty of nice looking areas, same goes for Oblivion. If you want a large world and more time to spend on game mechanics then generated terrain is your friend, especially since a terrain building algorithm tends to generate some nice looking worlds *cough* Oblivion *cough*. As for werewolves making you supreme, the point is that getting a disease like Lycanthropy is supposed to have a nice advantage (speed, strength etc.) but have a disadvantage. Like Vampirism, you get uber buffs as you get higher level vampirism but you also take progressively higher sun damage to the point that you can't stay out in the sun for very long before you burn to death. As for random loot, but even Oblivion had powerful loot hidden in special places around the world like Morrowind, the difference is that Oblivion's was leveled. This was an attempt to fix the problem with Morrowind where if you found a high level piece of gear you could just steamroll your way through the game without any trouble. So there has to balance somewhere, you just can't just throw caution to the wind and let things be exploited.
What's wrong with a algorithm generated world?...well I'll just say go play Gothic 1 & 2 or Risen and you'll see the difference...specially designed world gives the game more realistic feel and also gives places that really burn into your brain. Oblivion world was just repetitive and quite frankly hasn't got much to do in the wilderness...so few enemies and repetitive dungeons that all look and feel the same. Just look at the modding community and you will see how many things are wrong with a world like that...in oblivion story was really short and all those oblivion gates and towers were just stupid all the same boring repetitive junk...as for the sidequests apart from some nice ones, most were just repetitive in ''go to that dungeon and kill that guy'' sense. I would understand a generated world if there was special loot and enemies but since it all depends on characters level...world in Oblivion Really really svcks I mean there should be places where low level char shouldn't dare to go. But since in oblivion enemies level with you there is no real fear of dying is there. Also all the weapons that become available as you level up is just stupid...some players are more resourceful and find a way to get the money and buy better equipment that's the whole point of RPG. Having to wear the same crap until a certain level just svcks!!! Also the really small amount of different weapons and armor svcks too, that's why there were so many mods to begin with, that feature hundreds of new weapons!!! That's the problem, RPG has a brand new meaning since the days of Diablo ....so those outdated random loot lame games really don't cut it anymore. Those who play RPG's know how nice it is to find that special weapon that you can't buy and really helps ingame!!! Also in games like gothic, oblivion, two worlds ...i like the exploring part...it's essential that a game has a replay value and that the world doesn't feel dead, and sadly Oblivion is perfect example where exploring on your own gets you no advantage at all...most items are quest related and most quests are in towns so...LAME!!!! I like a challenging world where you can't wait to level up enough to kill that beast and check what loot is in store for your trouble.
As for werewolf curse there is a limitation of being discovered by people, maybe some powerful werewolf hunters that set you a trap, citizens refuse to trade with you or all even run away and hide from you....possibilities are limitless if you have an imagination.
I guess you never played Gothic1&2 series because maybe graphics aren't good enough but hey true gamers will tell you they would choose to play Gothic before oblivion everytime...sorry but graphics aren't enough!!
I really recomend you go play Gothic 1&2 and if you really can't get pass a few bugs play RISEN i guarantee you will feel the difference where the world is challenging and deep!!