Not at all, Oblivion is like 15 square miles or something and is supposed to be the biggest province of Tamriel. It represents the province but isn't supposed to BE Cyrodiil. The Imperial City is a city with millions inhabitants not a small village with like 100 people in it. I don't know if 'simulation' is the right word for what I meant, but Oblivion and (to a lesser extend Skyrim) are worse with this than Morrowind, since Morrowind just represents Vvardenfell and therefore the scale is more realistic than Oblivion and Skyrim that try to squeeze whole provinces into a game with a map of around 10 square miles.

In Morrowind, Oblivion and Skyrim most people are part of a quest, have a shop or are relevant to the player in some way, tjhere are all most no 'random strangers, villagers' or people like that that have nothing to do with you, while in real life you walk past lots of people you will never get to know, especially if your travelling all the time and don't stay too long in a single place. Most mines I have entered in Skyrim are not just taken over by bandits or are abandoned (I've not found an functioning mine yet) but have another 'secret', many times the bandits have stumbled upon something while digging. Are there no functioning mines in Skyrim(lore wise)? Have all mines interesting secrets in Skyrim? off course not, but the normal mines are left out because they are not relevant to the player.
Morrowind, Oblivion and Skyrim are designed in a way that allmost every thing, person, location is relevant to the player, very 'gamey'.
In Daggerfall, with it's size of more than a hundred thousand square miles you have so many NPC's you'll never talk to, locations and towns you will never, even after playing the game multiple times, will visit. It is really a whole world rather than a representation of the world scaled down immensely.

And before you point it out, yes Daggerfall isn't a realistic full representation of the region. It doesn't have (as far as I know) mines or lumber mills like Skyrim or farms for that matter. But it was made 15 years ago, if Daggerfall was made in 2011 with the budget, technology and team size that Skyrim had (but with the same design philosophy and goal it had back then) it could have added far more.

I don't say that 'everything has a function and every location has something interesting' is a bad design, I don't say that at all. I just say that Daggerfall is a completely different game at it's core while Morrowind, Oblivion and Skyrim are variations of the same idea basically so the changes between them can be compared with each other in a way that is completely impossible when comparing Daggerfall and later TES games.

Hmm... I've stumbled across at least three functional mines in Skyrim - Dawnstar is built on one - it has no problems, though the town itself has problems. There's one just outside Riften with some spiders, but nothing sinister going on. There's also one in Hjaalmarch, which has fallen behind in shipments, but is otherwise functioning properly. And the one Markarth draws its wealth from is working too well. But, the "problems" they have seem to be mostly routine... except the spiders, which is just unlucky.