Beards alone made Skyrim better than Oblivion in every way.

I hear you on this note.

How did I forget beards? Seriously.. Skyrim's CC has been is vastly better than Oblivion's in almost every sense.

I think the real reason is because Beth wanted to distance themselves from what Oblivion offered in this regard. While it let you customize your hair colors, it was also fairly buggy and if you kept tweaking it eventually you couldn't revert (without resetting the whole thing anyway) without literally tracing all of your steps backwards, and even then. You'd be left with some super bright pastel type colors.

M'aiq thinks you would enjoy Oblivion's character creation...

• http://www.google.com/url?sa=i&rct=j&q=&esrc=http://forums.bethsoft.com/topic/1497018-so-why-not-crazy-hair-and-eye-colors/s&source=images&cd=&cad=rja&uact=8&docid=AmHGLPjQeFVFyM&tbnid=yBvLjSVHryuI-M:&ved=0CAUQjRw&url=http%3A%2F%2Fsteamcommunity.com%2Fsharedfiles%2Ffiledetails%2F%3Fid%3D82449870&ei=SI0zU-GeKMS1qQGYz4DIBA&bvm=bv.63808443,d.aWc&psig=AFQjCNGzQAL_uXrPv7sBRLa-Zk3AP0QJ9g&ust=1395973803668736
• http://fc06.deviantart.net/fs19/f/2007/273/f/e/Oblivion__Character_Creation_by_TheMinttu.jpg