I agree that Skyrim is
far too small and scaled down. It's tiny really. Walking between different holds or going south to north is like a 5-10 minute stroll in the park, when it should feel like an epic journey. But no. Going for a linear gameworld instead would be THE WORST thing that could possibly happen to the series in my opinion.
For me, the key to a good open gameworld is finding the right balance between hand-crafted design, and generation. It's funny really.... people complained about Oblivion feeling too generated with not enough attention to detail. Now with Skyrim, I think the gameworld is almost
too hand-crafted. Sure, there's things to find and see every few steps you take, but it all feels so horribly compact and out of scale. One minute you're in a sunny forest - a few minutes later you're in an icy wasteland. Some big, randomly generated wildnerness areas could make a huge difference in spreading things out a lot without demanding too much additional dev time.
I'm not even entirely convinced it's technology holding the scale of the gameworld back. It could be a number of things. Perhaps criticism of previous games has put Bethesda off using random/procedural generation even in moderation. Perhaps they're worried some gamers would find a huge gameworld too overwhelming and tedious.

With the next TES game, they should really aim to up the scale of everything by at least 2x, if not more.