They by far and without a doubt watered it down for console users.
Lowest common denominator = maximized profits.
The Mods can't come soon enough. I am still having a blast, and in my opinion, combat is light-years beyond Morrowind as far as the challenge goes... but yeah, I remember FINDING the lost forge of so-and-so in Morrowind... figuring out how to get in, and fighting past stuff that was way beyond my level... the reward was one of the best weapons in the game.
Anyways, there are tons of sweet items you can get from the Daedra shrine quests.
But I have already tweaked the hell out of my game to remove the console faggotry. (No fast travel, no hand-holding quest markers, slower leveling mod, etc.)