With Morrowind's lycanthropy, you do get rewards; as you do the main quest as a werewolf, you get new abilities from Hircine, and being a werewolf itself has some perks (namely anonimity from crimes and improved melee capabilities (for some)). Obviously there's a limit to what you can get because the quest line is of finite length, but isn't that the same with anything else? Why play an assassin character since you can run out of assassin-related quests? Personally, I found it rather fun to use my lycanthropy to take on the various Dagoths.
The main failing of Morrowind's lycanthropy was how being discovered as a werewolf effectively stopped the game, and that it wasn't designed to be used outside of Solstheim. Vvardenfell didn't have (m)any respawning NPCs to feed on, and there wasn't a way to prevent changing for important tasks that required you to be normal. There are mods that fix that stuff, though.. ones that add respawning NPCs, the ability to prevent changes (with Hircine's Ring), and make it so being discovered as a werewolf doesn't effectively break the game (by making it regional with a time limit). Just as there are mods to change how often you change.