Quite frankly I think you valuated some of the points in your OP a little one-sided.
Yes, Balmora has canals, but most of Morrowind is covered in hostile deserts or farmlands. There are plenty of poor places there that consist of crummy shacks and small stone buildings. And while Vivec is separated into neat quarters, they are built from dried mud and Vivec itself is a temple city. Not exactly the pinnacle of technological evolution. There were even a lot of Nomads in Morrowind!
Yes, Oblivion has a more clear medieval look to it, but it is a very advanced version of that style! Every town in Tamriel has fortified, well-maintained walls. There are huge, sprawling keeps to secure the land along with well-maintained roads and a diverse network of infrastructure. This is obviously a more advanced place than Morrowind, where Civilization was mainly along the coast and the inlands were largely dangerous wildlands. (I am thinking of the Ashlands especially)
Finally Skyrim. Yes, Skyrim is a somewhat more backwards place than Tamriel in Oblivion. But you have to keep in mind: Skyrim was always a remote, hostile place and at the edge of the Empire. The Empire itself has been in decline for years by the time we play Skyrim. And lastly, Skyrim itself has been in a Civil War for quite a time now.
With these points in mind, I don't think that there is such a clear trend in the TES-Universe that you can confidently claim it is in decline. It is a nice thought, though.
Yes, Balmora has canals, but most of Morrowind is covered in hostile deserts or farmlands. There are plenty of poor places there that consist of crummy shacks and small stone buildings. And while Vivec is separated into neat quarters, they are built from dried mud and Vivec itself is a temple city. Not exactly the pinnacle of technological evolution. There were even a lot of Nomads in Morrowind!
Yes, Oblivion has a more clear medieval look to it, but it is a very advanced version of that style! Every town in Tamriel has fortified, well-maintained walls. There are huge, sprawling keeps to secure the land along with well-maintained roads and a diverse network of infrastructure. This is obviously a more advanced place than Morrowind, where Civilization was mainly along the coast and the inlands were largely dangerous wildlands. (I am thinking of the Ashlands especially)
Finally Skyrim. Yes, Skyrim is a somewhat more backwards place than Tamriel in Oblivion. But you have to keep in mind: Skyrim was always a remote, hostile place and at the edge of the Empire. The Empire itself has been in decline for years by the time we play Skyrim. And lastly, Skyrim itself has been in a Civil War for quite a time now.
With these points in mind, I don't think that there is such a clear trend in the TES-Universe that you can confidently claim it is in decline. It is a nice thought, though.