The question is; how important is a state-of-the-art conversation systems to the overall game?
At its core, the defining activity of an Elder Scrolls game is going into a dungeon, beating up the tenants and stealing their pensions. Of course, there's more to it than that and a lot of different activities besides that, but that is the core. A realistic dialogue and conversation system would be nice, yes, but unless it connects back to the core of the experience, it's more of a decoration. Those are important, too, but not nearly as much as making the tomb raiding fun and engaging.
Better animation, better voice acting et cetera would improve the experience a lot and be well worth doing, but the NPCs are part of the background. That is where they belong. They're there to buy your loot, give you tasks and add flavour to the environment. Skyrim was a big improvement, and there are plenty more little tweaks that would be worth doing, but the NPCs and dialogue shouldn't be the main focus. Hell, I'd say Fallout 4 suffered more than it gained from trying to re-invent the dialogue wheel. It's a different property, but I'm really worried they'll do something similar in the upcoming TES game, too.
Improvements all around for the NPCs and dialogue system would be nice, but more varied dungeon tilesets would be time spent much better. Unless the whole game is an Agatha Christie mystery.
(Of course, no one in the thread is suggesting a big Smalltalk Simulator: Tamriel Edition, I'm being rather hysterical as well as merely apologetic. But I wonder what some people want from TES, sometimes.)
EDIT: Come to think of it, I think I've got an example. I really like Oblivion, despite its many problems. But there is a lot I don't like.
I had read in some book about the ancient Alessian order, which said that their headquarters used to be somewhere by Lake Canulus. So I went over there on an Alessian expedition and found nothing at all. Other books said the place had been razed, certainly, but at least the tiniest trace would have been nice. There was a ruined fort, but it was the standard, interchangable fort that could've been anywhere. An Alessian statue, some old murals or even just a plaque somewhere would have done. Same with the Ayleid ruins, not enough little details to connect it to history or the lore.
There was a lot of other little details like that missing that really dragged the game down for me. I can't help but wonder how many man hours that new dialogue system and disposition mini game took, and how else it could have been spent.