The graphical difference between Oblivion and Fallout 3/Skyrim isn't very big. Skyrim uses the same sort of technology with some additions that honestly don't look as good as they ought to by now. Skyrim even has some limitations Morrowind didn't have, which is why I could decorate my house in Morrowind with enough lights to look like a disco.
Gamers these days have an odd obsession with the tools used to create their games rather than the design of the games. Sometimes the dungeons in Skyrim look worse than parts of the dungeons in Daggerfall. It's all in the design, since obviously Daggerfall is very limited on the technical side.
And yes, I play Daggerfall. I'm more interested in game design than graphics most of the time. My favourite additions in Skyrim are the things that make the world more interesting to play in, like the rivers and waterfalls, more ingredients, etc.
Decorating in Morrowind was easy because the game did not have physic except the dropper items fall to floor level.
Because manipulation items is hard, it's problematic to place them with physic.
Dungeons in Daggerfall was impressive large but did not look good, they was also put together by random pieces so they made less sense than dungeons in later games.