Your point about the questgivers in Morrowind staying out of harm's way, unlike Oblivion and Skyrim is well taken. I hadn't thought of that before, but it makes sense. I still think they could do it Morrowind style in Skyrim adn Oblivion by making those quest givers that are exposed to battle so darned tough (and leveling with the PC) that they would rarely be killed without a concerted effort by the PC. I am thinking of the Unicorn in Oblivion. Chances of it accidently dying in battle were almost nill. If it did happen, then you would still get the message telling you you better reload a prior save.
Interesting enough, I did get a similar message in Skyrim when a Dragon attacked outside of a City I had just visited. While in the City I had picked up a couple of minor side quest that involved NPC's living in and around the City. During the battle with the Dragon, two of them were killed and I got messages telling me so. When I wen tinto my quest journal those two quests were gone. I reloaded and fought the Dragon again several times and every time, at least one of the two NPC's was killed. I finally gave up and accepted the loss of one of the two quests (managed to save the life of the other NPC and his quest).
I suppose some people would be really upset that they could not finish the quest, but I was ecstatic because it felt like my actions (in this case failing to save an NPC from a Dragon attack) really had an impact on the world. TES could be very much improved if they went back to the Morrowind style for all quests because then the impact the PC could have on the world would extend beyond the minor questlines and the player would always have the option of reloading a prior save.
It also makes sense that you could toggle this option in the Options menu. The default could be unkillable questgivers, but let advanced players toggle that off and get a message instead when a questgiver is killed.
In fact, TES games could be vastly improved if they had an Advanced Roleplayer Options submenu that was only for advanced roleplayers, where you could do advanced things like toggle off the unkillable status of essential quest givers. This would allow Bethesda to appeal to its broader audience without alienating the core roleplayers.
I can think of a few other things I would like to see on an Advanced Roleplayer submenu, like toggling off questmarkers entirely and replacing them with better directions from hints in the world. That's been discussed in other posts and the cheif obstacle is apparantly the voice dialog, which adds cost and takes up inordinate space on the disk. This limits the information that NPC's can convey. Well, how about an option for advanced roleplayers to toggle additional text based dialog options from the NPC's? That way advanced roleplayers could still adventure Morrowind style and the broader audience could simply follow the quest arrow.
There are probably a lot of other things that could be toggled with an Advanced Roleplaying option that would make advanced roleplayers happy while keeping the broader audience happy. The cost of incorporating these changes may be too expensive, but it would really improve gameplay for advanced roleplayers.