My 2cp.
Morrowind as a game was frustrating, but amazing at the time. They created a learning/leveling curve partly by intentionally making you a garbage fire at low levels. If anyone tried being a 'monk' character (unarmed exclusively) at low levels would have witnessed this upon spending the better part of an hour in epic combat with a mudcrab. In addition, the leveling multiplier system was an abomination that for some reason they carried forward to Oblivion as well. As others brought up, the journal was absolute crap, though the UI was better than Skyrim's just because it was designed for a PC (even if it was a pc @ 800x600). This doesn't even get started on the bugs that were in until it was patched/repatched by the community.
Having said that, there were a few things that made MW as popular/famous as it was, for one the game world was huge, absolutely ginormous for its time. Now, Daggerfall was bigger but it was all that random pseudo-dynamically generated content rather than actually crafted. For comparison, Vice City (2002) had a landmass size of roughly 5.7 Sq Mi (much of which was water), morrowind was around 9.3 Sq Mi. Now, landmass does not a game make, but there was tons to do in it and it was a true 'exploration' game, which we hadn't really had much of up to that point. It was a borderline single-player MMO (I remember it being described as such at the time) and had a pretty solid diversity of environments to reflect that, like swamp regions, underground caverns, derelict fortresses, wizard towers, etc. It was like a more robust version of Ultima IX (1999) with far more customization, a (while arguably weaker) less linear story, and far more choice with what to do with your character.
In 2002, other top-of-the-line games were Warcraft 3 (no FT), Neverwinter Nights, Metroid Prime, Dungeon Siege, Zelda:WindWaker, Kingdom Hearts, Jedi Outcast, and a handful of other relatively forgettable titles. A lot of these can still carry their weight to an extent, mostly thanks to modding (same as Morrowind), but the capabilities of the title need to be kept in perspective with the time period that it was released. True effort into things like location-based hit detection (Max Payne, 2001), extensive modding (aforementioned WC3, far outpaced Starcraft), open world non-procedurally generated worlds (GTA3, 2001), reasonable open-world AI (Morrowind arguably, with faction-based AI combat and scheduling.. might throw Black and White, 2001, in there) were very new. In addition, they tried a whole slew of relatively untested new things, like spell creation (personally saw a gimped version of that in Betrayal in Antara first, 1997), item enchantments, aforementioned AI systems, and a *very* wide design scope for a single player game (much of the stuff they did was normally relegated to MMOs), much of which was completely unheard of at this timeframe.