Good combat is highly dependant on AI, and when you have a game that is as big and open and has as many NPC's as Skyrim has its hard to code AI to think logically enough without overwhelming system resources. You have to make trade off's when making a game of this scope and magnitude. I think the combat has improved since Oblivion, not alot, but its improved none the less. We get to have skirmish battles now that include 20-30 NPC's all on one screen, you try doing this in Oblivion or Morrowind and it will use twice the amount of system resources and often crash the game. Blocking, bashing, tactical use of weaponry has also been enhanced, albeit not very much.
I too wish that diplomacy would play a larger role in the game. I enjoy the fact that in Fallout NV its possible to play a character that has no combat skills and still beat the game. However, I think the motif and setting of Skyrim isn't ideal for such scenario. Skyrim is meant to be a savage place, a place where talking your way out of situations isn't always going to be feasable.