For me, it probably is.
Morrowind has a certain charm, to me, but I cannot hack it's crappy combat and spells systems, or 'chase the hyperlink' dialogue system. I remember it fondly, but just can't replay it any more.
Oblivion had a number of improved in-game mechanic tweaks, but at the end of the day it lacked soul, for me. All the NPCs were just so generically cheerful all the time.
I probably don't have quite the negative view you do of Oblivion, but generally, this is how I feel.
Morrowind was amazing (my favorite game of all time), but aged poorly. It's poor gameplay mechanics make it very difficult to go back and play. However, it has great depth in terms of character design and customization.
Oblivion drastically improved in the gameplay department, but it lost a lot of the choice that made Morrowind special. There's still tons of it, and I still love Oblivion (2nd favorite game of all time).
Then came Skyrim, which improved upon what Oblivion did right, and as far as I'm concerned, removed what it did wrong. Yes, there is a lower number of skills, but I feel it offers far more choice by giving deeper skills than ever before. The world is so much more detailed, and so much more alive. It just has so much more heart. As someone who's never really had a fondness for Nords, I have fallen in love with them by living in their world.
Skyrim became my new favorite game of all time, bumping Morrowind to #2 and Oblivion to #3. It's improvements far outweigh the minor things it lacks.