FPS: Since everything is in "first or third-person", graphics is a must. Afterall, the player sees everything and relies purely on his own eyesight to note objects, etc. Now given todays standards of graphics = immerzun, any game not on par with OMGZORS Far Cry/Crysis will always be second place or lower.
Result: Since graphics IS the priority, tons of resources must be devoted to making UBER POWNZORS GRAFFIKS. This knocks up the development costs which in-turn, requires the game to sell more units to be a hit (oh yeah, keep in mind those greedy corporate fucks arn't just content with profits (they demand UBER PROFITS). Otherwise, the game type is considered a market failure and not worthy of continuing.
Voice Acting: Same vein here. It costs MONEY (especially so since Bethesda seems to need a narrator for EVERY FUCKING THING). Again, more development cost that needs to be made back by producing a game that caters to the largest denomination of players out there.
Linear/Boredom: FPS are tedious and boring, hence their major appeal comes from multi-player. I mean, play through any FPS and you will know you have to check EVERYTHING, just to get to the next level. Since buildings and enviornments are also scaled to reality, checking office floors and warehouses IS a pain in the ass. Its like going to Walmart to find some obscure keycard. In Morrowinds case, its great they have awesome and pretty enviornments like forests. The kicker is, just like their real life counter-parts, its all empty (besides the whole sight seeing bit). Go to obscure cave in the middle of the Amazon. If I wanted a tourist adventure I would go to the Grand Canyon.
ISO: Because navigating through a real life Phoenix, Arizona would take HOURS, shit has to be scaled down and require the player to use some iota of imagination. Smaller maps means less work for artists, programmers, graphics guys, bug testers, etc. Because the player is not seeing through his own eyes, some things like cups and shelves and walls, need not be super duper defined with shitloads of polygons (I means its a fucking wall afterall). This also means there is more room in the budget to add in things like items, quests, dialogue, choice and consequence, etc.
Sorry for the soapbox rant but I seriously am tired of everything having to be super fucking shiny. Just because the majority of kids these days need everything handed to them on a silver fucking platter. I am tired of people who think PWNZOR GRAFFIKS and VOICE ACTING are things that can be focused on without affecting anything like budgets or deadlines or bugs or profit margins.
Thats the reason why the game industry sucks. It used to be divided into casual games (consoles) and hardcore games (PC). But at some point, some greedy fucks decided to just merge everything together in order to gobble the entire market. The result? You get consoles steroided up to play PC style games (but without the flexibility and ease of control that a PC offers). Everything is dumbed down to fit the control scheme or the new primary demographic. The variety goes to shit and all you get is fish, (which they keep telling you is steak) when all ya wanted was a steak (HOMAGE MOMENT).
I mean we have Red Faction, Killzone, Crysis, RAGE, Resistance, GEARS, HALO, Just Cause, MW, CoD, Operation Flashpoint, a re-doing of Battlefield Vietnam, Battlefield Special Ops, Battlefield 2042, Conduit, FEAR, the list goes on and on.
BTW: A very good read on the take between third/overhead view compared to first person view.
http://www.kotaku.com.au/2011/04/first-or-third-person-whats-your-perspective/