As an avid Wood Elf fan i DO NOT want to see Elsweyr robbing Valenwood of precious content keep the provinces seperate

Also This has been done already its called Arena.

As has been pointed out already, the limitation isn't memory, processing power, or disc space. The one thing which will almost certainly prevent a game from featuring all of Tamriel (other than in some crude, watered-down, or cookie-cutter form, like in Arena), is manpower. The amount of time and effort to create all of the different terrain types, architectural styles, local clothing, and regional armor types, as well as all of the various background cultures and lore, would be absurd, if not impossible.

If Bethesda puts the entire current Skyrim development team to work on the project now, it MIGHT be ready by 2025 or so, by which time it'll need to be redone, because the earlier parts of the work will have become long-since obsolete, and probably won't run on the newer platforms of that day. Of course, by that time, Bethesda would most likely no longer be in business, mainly because of the enormous costs of continuing "the project from hell" that has been costing a small fortune every day, but hasn't been making them a dime, for over a decade.

In short, if it ever happens, neither you nor I will be happy with the result. Let's just hope it doesn't.