It's defiantly because of the variation, every square foot of land matters so much more than it did in oblivion.
I have to wonder how people can get this idea.
There is more variety in landscape in Oblivion than Skyrim. Snowy mountains, large bodies of water, wooded regions, lush grasslands, dry grasslands, swamps, etc. And lots of nice finds, carefully placed items and structures.
Maybe this comes from not really looking at Oblivion in any detail. And just buying in to the falsehood of Oblivion not being hand crafted.
True, there are no giant mushrooms in Oblivion (except for Shivering Isles), but then no giant mushrooms in Skyrim either.
Poor Oblivion gets such undeserved criticism.