It paved the way for the open-world phenomenon, you fool. There was nothing like it at the time in that gen. To call it bad is a matter of personal taste. It was objectively unique and un-comparable.
Sure Morrowind was better, but Morrowind was on a completely different gen, on a completely different console, where NPC's stood still. These NPC's had schedules and AI. It was mind-blowing. Sure it was primitive and aged poorly, but that's because of the games that it inspired. They took the torch and ran and left it behind in the dust. Without it, we'd be playing the Witcher 3 in hallways. The DLC was incredible as well.
We can sit here and talk about how lame it was to swing your sword at a troll 59 times to kill it at level 29, but that's missing the point of the game
Also, horse armor