Just my 2¢, but Skyrim is the backwoods of Tamriel. Having cities the size of Oblivion's or Morrowind's would not make much sense. FWIW, average *large* cities in medieval times contained several hundred to maybe a couple of thousand people. By those standards, neither prior game even approaches "true" city size. This is, of course, pretty much a necessity for hardware considerations. HOWEVER, neither Oblivion nor Morrowind approach the intelligent design and consideration of city development that Skyrim does (that I can readily recall). Outlying farms, mills, etc., are a major part of Skyrim and, technically, probably should be considered part of the city they surround. All that being said, Skyrim's cities are livlier, more vibrant, more "real". NPCs interact with one another, go about their business, watch you as you pass. They're more aware and "alive". I'll take Riften, Whiterun, heck even dilapidated Windhelm, over the unconvincing blocks of the Imperial City in Oblivion any day.
I agree with that point on Mournhold and the entire Imperial province...
Vvardenfell where Morrowind takes place however opened up for inhabitants somewhere like 20 or maybe 25 years before the game started. It's a barren waste land filled with ash. So I don't think people can live easier there then they can in Skyrim...
Still cities in Skyrim are beautiful, they are just shown in a very efficient way, showing nothing more then what is relevant to your game, which can make them seem small...