It didn't live up to its predecessors
LEVEL SCALING
When the whole world levels with you, there is never anything thats either way too hard or way too easy. This means you'll never revel in the joy of accomplishing something thats too hard for your level. Nor will you ever take your frustrations out on low level baddies. Truly, you'll BARELY feel like you're progressing at all. It also leads to an unexpected effect in game: after a certain point, crappy gear is the RAREST loot in the game, since all encounters are equipped roughly the same as you.
PHYSICS
Yeah, it looks pretty, but it completely messes up one of my favorite things to do from Morrowind: Collect & Display. There's something satisfying about returning to one's layer to find one's stacks of precious gems, trophies of fallen foes, unique relics, etc. Not so in Elder Scrolls. One collision and your carefully assembled display becomes a shotgun blast of loot that isn't even worth cleaning.
REPETITION
This is aggravated severely by the level scaling, but after a while, everything just feels the same.