What's wrong is that people decided that Morrowind's alien world (which is an oddity when compared to the rest of the series) is what TES "is". An awful lot of TES is http://tvtropes.org/pmwiki/pmwiki.php/Main/StandardFantasySetting. Just because MW was full of giant mushrooms & wacky bugs, doesn't mean that it's what the series was defined by.
(Of course, then Beth appeased the "but but... giant mushrooms! Weirdness!" crowd who only knew Morrowind by making Shivering Isles. And tried to preempt that same crowd in Skyrim with Blackreach. Which apparently hasn't worked, given the number of "but why isn't it all weird? It should be all weird!" threads.)
Well said! Is there an applause emoticon? Or a high-five one? I agree with you 100%. People expect everything to be like Morrowind, and are disappointed when Skyrim (and come to think of it, Oblivion) aren't.
I disagree. I thoroughly enjoyed the Shivering Isles questline - I've completed it recently - and find the whole place to be intriguing. Of course, I prefer to more realistic environments that Cyrodiil and Skyrim provide, but that doesn't mean that the Shivering Isles were 'designed by an 8 year old who was high on sugar'. I think that the Shivering Isles was an excellent expansion to Oblivion.