Now, I actually struggle getting into Morrowind as a game, I play Oblivion way more often, but I'd definitely say I prefer Morrowind's world.
I'm not entirely sure if generic is the right word, but I'll attempt to explain why I think Oblivion's world is a little bland.
Firstly the style. Oblivion, all in all, seems a pretty generic European style. Cheydinhal (despite apparently being Dunmer inspired, really closer to the Morrowind Imperial style), Chorrol, Skingrad and Leyawin are probably the most generically European. Anvil has Medditeranean features, Bravil seems pretty original and Bruma is obviously Nordic. It's nice seeing some variation there. The Imperial City is probably the most original style, and I quite like it (shame there's so little to do there). The European style probably would have been great, had I not already seen thousands of fantasy worlds feature that style. Morrowind on the other hand had very interesting and distinct styles. Could anyone guess what was the single main influence for the Hlaalu architecture in Morrowind? And then there's the Redoran stuff made of shells of giant crustaceans, and the Telvanni stuff with giant twisted mushroom buildings. All very fantastical, exciting and unique. Yet they also had Imperial buildings for those wanting a more homely world. Actually fewer unique styles than Oblivion, but each felt original, new and diverse. Then it comes to the landscapes. Now, like architecture, I often defend those who say Morrowind was more diverse, because they seem to forget that Oblivion had snowy mountains, rocky mountains, huge forests, grassy valleys, dry coastlands and marshy subtropical swampland (my favourite). But with the architecture, most RPG gamers and/or people in Europe/America who would be the majority of the users, will be very familiar with most of it. Morrowind had much more alien styled landscapes, with arching rocks, fetid swamps, the (though these were pretty dull) ashlands, weird rocks jutting from the water in the surrounding islands, lava, along with some semi-normal but still sort of alien landscapes like the farmlands and plains.
And really, one of the biggest parts was how the world fit together. After seeing Morrowind, Oblivion, honestly, feels sparse and disjointed. In Morrowind, the towns feel like they're built into the landscape, it all blends seemlessly and naturally, and when you travel around the world, there is a wonderful sense of discovery, everything you see is handplaced and seems different to what you've encountered before, dungeons., towns etc. Whereas with Oblivion, and I think this might be partially to do with the fact that the cities all have identical walls, I just feel like I'm walking along and then there's a big brick wall appearing. Yay. And while they still are to some degree, they don't seem to be built into the world so much as just sitting there. I love it when I see things like Markarth constructed into the cliff, and Riften seeming to be so connected to the lake it's on and the forest surrounding it. And then, returning to landscape again, the procedural placement ofthings in Oblivion makes it much less interesting. The whole forest area or the whole marsh area looks more or less identical, no distinguishing features for diffferent locations in it. And the ground is all rolling hills the whole way in a fairly consistent pattern. It's just all too smooth, not interesting enough.