"The second crucial facet of targeting implies a strategy of hit-detection, where the game server validates whether or not an attack met its target. There is a tremendous amount of excitement regarding the movement towards FPS style mechanics in MMOs; a type of system which tends to increase immersion and engagement. This innovation comes at a cost, however; while internet infrastructure has improved dramatically since the early years of the MMO genre, latency, variance in connection speed, and geographical separation of players still pose difficult challenges for FPS style hit detection on a massive scale."
http://tamrielfoundry.com/2012/12/targeting-in-eso/
It is just a stupid excuse, in Darkfall:UW when you use your melee weapon, you are switched to 3rd person view, when using a bow or staff you are in first person and it is like an FPS.
The Elder Scrolls Online does look a bit better though but Im sure Unholy Wars will look great if you play it on max settings. I know TESO will have more people playing and will make more money then Unholy Wars because of the franchise behind it (unless UW has some surprising success) but as for a better game, UW will probably be better.