I think the geography and view distance had something to do with that. Morrowind was all mountains and canyons with a low view distance so putting lots of dungeons close together wasn't a problem since it wouldn't looked too packed. Oblivion couldn't really have added more dungeons without looking packed full.
Still, it's no excuse for the fact that the dungeons that were there were crappy.
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Best LPer ever, Gix ! : http://www.youtube.com/watch?v=Vt5YKmP7ecY