Oblivion goes too far in attempting to give you a blank canvas. Allow me to compare my favourite RPG ever, Planescape Torment (yes, I know, this is a Dragon Age thread, but
you, I'm talking about Torment), and Oblivion.
In Oblivion, you can be anyone. Orc, elf, furry, viking, black guy, warrior, man, woman, thief, mage, crazy-ass-hybrid... doesn't matter. You have no predetermined backstory, either, aside from having been in prison at one point. Freedom!
In Torment, you are a human. You are male. You appear to be in your 30s. You are ugly as sin, and can only choose from one of three classes. Your backstory is set in stone. You have a specific, pre-determind way of
walking, a specific way of talking. You do not choose your name. You are limited.
It sounds like the former should be better for roleplaying, but I find that it is not. Computer games are not pen-and-paper. They have very real limitations in their writing. The writers for Bioware, Bethesda, Obsidian, Black Isle, Troika... they can only write for so many of the innumerable characters you have in mind.
The end result of this is that in Planescape Torment, you have a character who interacts with the world around him. His mannerism, his appearance, they are noticed by others in the world around him. People who know him talk about the things he did years ago. Now, what you do going forward is more-or-less up to you, but the point is: there are heavy restrictions in place on who your character is, and because of this, he is a legitimate character.
Compare this to Oblivion. The writers could not possibly create dialogue for all the jillion characters that you could create, so dialogue to and from your character is as generic and vague as possible. You have no backstory, so nobody knows you - you are utterly alone. Your character never has any relationship with other people aside from "floating sword and shield that shows up to save the day". In the end, all that vaunted freedom leaves you pigeon-holed into the role of generic hero the thirty first.