I've seen some pretty atrocious anime.
So have I. The thing is, I've also seen good ones. And bad live action (my god, my god, have I seen some baaaaaaad live action). But you yourself said my other response:
That said, I do think that the TES world would translate fairly well to tat medium...but even better to live action. As long as the artistic direction is chosen correctly (Lord of the Rings > Avatar) it would prolly be pretty cool.
I think IF TES were ever made into a movie, no matter what medium it was the art direction would be the biggest thing, both for writers and actors and directors/animators.
But then again, this is all just "what-if."
Another reason I think any sort of TES animation of any style (eastern or western) would be ideal is because of the reasons I first stated of it being easier to get across for less money, but also for a more selfish one. I am sick of people assuming that all animation is just kiddie movies (a phenomenon known as the Animation Age Ghetto) because it limits the artistic vision of people who want to make animated films with serious stories but run into hurdles because producers will either force them to make it live action or force them to change it to be kid-friendly. It's really a pain in the ass.