Morrowind had simpler gameplay in its quests, but more often required thinking on the part of the player. More importantly, they related to a world that was deeper than a mud puddle with Narnia reflected in it. And the rewards you got had the potential to be actually useful in a world that didn't revolve around the character and could aid in your meaningful progression.
Just because you think that they required more thinking (which I disagree with) doesn't make them deeper than Oblivion's. Personally, Morrowind lacked in the rest of the game in favor of a really good main quest. Oblivion did the opposite, it had potential to be an amazing main quest but they spent more time on the rest of the world and the side quests, which imo was well worth it. Also, useful rewards still don't make them any more deep than Oblivion, especially since the reason they were more useful is because you could do a high level quest and get a high level item early-mid game and just own everything with it. That's not my idea of fun, my idea of fun is actually having a challenge, something Oblivion had more of, if still only slightly. Morrowind was the easiest TES imo, I just tore through the main quest and when I was done with the MQ, I tore through the extra content.
I'm sorry, but you're deeply mistaken. They didn't do it because they were OP, I fail to see how levitation, spears, enhanced weapon class variety and diversified wardrobes even quantify in the slightest as OP. They took them out because Oblivion's target audience wasn't, generally speaking, RPG gamers. It was to dumb down the game for people dullwitted enough to be dumbfounded by the variety and difficulty of gameplay and interaction that Morrowind presented.
No, I'm tired of the whole "they did it to appeal to casuals" conspiracy. Levitation was horribly broken where you could just hover over someone and just blast them with magic, arrows or just poke them to death with a spear. Spears were op for the reason just mentioned and the fact you could backpedal with them and always keep people at arms length while hurting them. The diversified wardrobes would be nice if that's all they were, they were abused by enchant stacking, it was broken, horribly, horribly broken. It wasn't a dumbed down version of Morrowind, Morrowind was less complicated than Oblivion. The just got rid of the things that let me steamroll through the content and got rid of the annoying combat system that was not only impracticle but annoying.