being overall decline when compared with Morrowind
I'm saying this as someone who's put hundreds of hours into Morrowind and buzzed about it on the Codex endlessly, even putting it in my top games list years ago:
Morrowind itself is an almost comical level of decline, especially compared with Daggerfall. It just gets away with it because of the setting and superb art direction. Barring the level scaling - which absolutely is the ultimate failure of Oblivion - I'm honestly not seeing the significant difference between it and Oblivion on a gameplay level. Both have really shit combat that consists of HP bloat in the early game and enemies going down instantly in the endgame, both have easily exploitable mechanics, both consist of very bland dungeons, and in both games you become nigh-invincible very quickly. Oblivion's slightly reduced array of skills is a shame, but then again who gives a fuck about having both a Long Blade and Short Blade skill. I haven't gotten access to Oblivion's spellmaker yet, but I've heard that's a step down too, so I'll throw that in.
Morrowind and Oblivion are both basically about wandering around a big open world and trying to find something to do. The choice to me seems to be between having novel experiences in a reactive but deeply boring world (Oblivion), or having boring experiences in a static but highly novel world (Morrowind). The latter ultimately wins out, because Vvardenfell really is an incredible setting while Oblivion's boring-ass Middle Earth stuff can't sustain itself for a whole playthrough, but people overstate the difference between the two games to a ridiculous extent.
If you go back to around the time of Morrowind's release, you can see people on the Codex ripping the absolute shit out of it, both as a standalone game and when compared with Daggerfall. I'm not entirely sure when or why the Morrowind veneration in popular culture started. It's an outstanding piece of software for people who want to really dig into a unique esoteric fantasy world and learn all there is to know about it, but it's not much good for people who want a tightly-made and interesting game. I feel like the core differences between Morrowind, Oblivion and Skyrim (and Fo3 and FNV, for that matter) are so much smaller than people would like to admit. Some of them (Morrowind, New Vegas) are far better works of art than the others, but in gameplay terms they're all just shades of the same experience.