On Morrowind
You are factually correct. The game that put Bethesda on the map was Morrowind, which you correctly did not mention in your post. Morrowind was anything but uninspired. On the contrary, it was one of the first games to feature a completely open-world, first-person experience. Groundbreaking for that alone, at the time. However, it was the unique setting of Morrowind that truly makes it one of the greatest games of all time. A bizarre, alien landscape full of magical powers and strange, cult like dreamers claiming the end of the world is near. It was as if someone took a sci-fi shooter and ripped the sci-fi and shooter elements out and replaced them with fantasy. You were casting spells and clashing swords with Orcs one minute, and then the next riding a gargantuan alien-esque “silk-strider” to a strange, pyramidal shaped city-fortress floating on the edge of the sea the next. And yes, every game Bethesda has produced since has been drivel — as if they thought it was the open world visuals and game mechanics alone that made Morrowind (and Fallout 2) so successful.
It is true that Morrowind’s graphical prowess was heralded as unrivaled at the time. In 2002, when the game was released, you would have been hard pressed to find another game of such scope and grandeur. Open world and first person were both distinct genres at the time, and the processing power to put them together into one game was only just becoming available. However, Morrowind’s stunning graphics only served to enable its story and setting elements, which were as unique as they were fantastic.
But your post remains correct exactly as it is phrased: starting with Oblivion, Bethesda (like other game studios at the time which produced works of greatness, only to follow them up with drivel) lost the plot. After being forced to sit through an unnecessarily long, linear introduction about some king, the player is spewed into a markedly cliché albeit ridiculously dazzling fantasy kingdom of knights and demons. No more aliens, no more weird cult followers. I think they did manage to throw the “dwarves” in there somewhere, but I’m not sure whether Oblivion actually managed to capture the stunning contrariness that defines the Dwarves of The ElderScrolls universe. (Dwarves, in TES, are not 4 foot tall thick brained miners that live under mountains. They like mountains alright, but they are a legendary extinct race of giants that seemed to blend magic and machinery to create steampunk-like automatons of immense power and strength).
Compare the above introduction to that of Morrowind’s: you are simply spit out of a boat, told that you were a prisoner on mainland who was sent to Morrowind as punishment, and you are now free to go. The entire island is your prison: goodluck.
And that’s it. You pick your name, race, and “what star you were born under”, but don’t even decide a class. And from there you have to figure everything out yourself. In fact, the game gives so little guide rails that even figuring out there is a “main storyline” takes 10–15 hours of play. In Morrowind, first thing is properly first. And by first thing, what I mean is looting every last item in the port building you are released into to get a taste of how much shit you can easily pick up off of tables. Next, you discover a locked tower and quickly realize even better shit is inside of that, but you are going to have to figure out how to get inside, since it’s locked and the lock is very hard to break. (You could either level up your lockpicking or, if you were smart, learn the lockpicking spell which made it much easier). But wait! Even if you manage to break the lock, if anyone sees you do it you will go to jail! So now you have to do it when no one is looking and learn to use the sneaking function.
Only hours and hours later, after foraging for mushrooms in the forest and killing mudcrabs galore, do you make it to a rather large city set inland some ways. At this point, you are greeted by the aforementioned cult follower, who says some strange words which are surely English yet nearly incomprehensible, and whom then proceeds to walk away from you without any further guidance whatsoever.
You could choose to try to find out more about this strange weirdo, who must definitely be important somehow to the game, but joining both the thieves guild and the mages guild and becoming the grand master of both organizations sounds way more interesting.
100 hours of gameplay later, you might remember that weirdo and try to figure out what Morrowind’s story is about. Or, you might not. I’m not sure I ever actually “beat” Morrowind. I am sure that I was the most powerful wizard/assassin on that island and that I had a full suit of green, glass armor with a matching dagger that simply could not be beaten. I don’t think I will ever forgot that set of armor, for both its strangeness and its absurdity. How could glass be the most powerful armor in the game? And why is it green?!? And yet there you have it: the true reasons for Morrowind’s greatness, after nearly 20 years of the entire game industry thinking it was about graphics.
(Aside: please apply the same argument to Final Fantasy (7, 8, 10). The loudest critics of the RPG game genre were the ones that got listened to the most, but they were idiots who just wanted FPS games and had no business commenting on RPGs. It was nerds and losers who were too scared to speak out about their opinions that loved these games, and they loved them for the intellectual prowess of their designers, not for the mechanical action sequences they provided. All this to the demise of the RPG genre entirely.)
(Aside #2: 8 is one of the greatest, but you had to be incredibly intelligent to understand what the fuck was going on. Not many could, therefore they hated it. And their hatred of it destroyed the entire rest of the series. You know exactly what I am talking about.)