That IS a little harsh, Oblivion was a pretty good game despite your attempted jabs at it. The biggest problem about Oblivion isn't about it's lore, (which BTW there is NOTHING wrong with) but the Extreme amount of level scaling, which I also noticed you never brought up.... Hmmm, I wonder why not.
Now to actually answer the Question OP posted. IMO the worst part of Bethesda's games is the writing tends to be a bit on the weak side. They do however, make up for it with the exploration in a wide open world where you can largely do whatever in the hell you please.
Playing the games on console is a waste since it eliminates the best part of the series: modding. Now if they actually push through that modding on consoles thing then this would be less true, but even then the hardware puts limits on what you can do with the game. You can't improve the visual quality, of course, and external scripting is out of the question on a non-modded console.
And yes, it treated the lore very badly. Prior references to Cyrodiil painted it as a massive jungle with very distinctive cultures from one region to the next, basically a highly variegated Byzantine Empire in the rainforest. What we got instead was 16 square miles of New England forest with Tudor architecture and bland-looking elven ruins all over the place. Also, the most egregious and iconic example of all is Mannimarco. He was an eight foot tall super-powerful lich with burning eyes in Daggerfall. In Oblivion he was a pansy wearing a crappy robe. Also, Pale Pass. The Akaviri invaders of Tamriel were Tsaesci, tall golden snake-vampire people, not humans. Examples like this are numerous.