Now that I've gone through several dungeons, I can say that the dungeon crawling is fairly enjoyable in this game. In fact, Daggerfall dungeons are better than the ones in Skyrim and Oblivion: underwater areas, actual exploration, elevators, levers, SECRET DOORS. You actually have to think in the dungeons, namely the navigation. The automap is still clunky but, I've discovered that the best way to use it is to stay in the top down perspective. If you scroll down and up carefully, you can spot unexplored pathways fairly easily. Secret doors will also be visible in the map. The exploration is fairly enjoyable this way. However, the experience is still very one-sided, since 99% percent of the time the enemies are not even a hindrance. Unless the monster is immune, a couple of hits are enough to kill it. Enemies only exist to drain resources, but since you can rest inside a dungeon, you are rarely in a real danger. I don't mind the recycled assets, since I approach this in same way as playing Nethack. The dungeon is a gamey abstraction, not a real place. It doesn't have to be logical, as long as it makes you think. However, the very bare bones combat system will leave the experience lacking. Games where the content is procedurally generated should lean heavily on their systems to make the gameplay enjoyable. Roguelikes like Nethack excel on this, as does the best game of all time: UFO: Enemy Unknown. Daggerfall, while being a good game, doesn't come even close to UFO for example, because of lacking moment to moment gameplay. Roguelikes rely on the lethal nature of the dungeon, interactivity and the large number of potential strategies, while UFO relies on its tactical combat system. To my present knowledge Daggerfall relies on massive landmass and endless dungeons. That is, more of the same. The problem is that the same is okay, not excellent.
Even so, Daggerfall creates very compelling gameplay moments. Imagine my satisfaction when I had mapped a large dungeon full of undead, entered a section with caves and heard familiar grunts of what could only be the giant I was sent to kill. I knew that after a long and arduous search, my next victim was finally near. By listening the grunts and exploring the caves I deduced that the giant had to be somewhere below me, so I backtracked back to the tunnels and entered the cave through another entrance, after finding the switch to open the portcullis.
Then I discovered that the giant was in fact camping with an ancient vampire. After a couple of reloads I accepted that vampire was immune to my elven steel and just quickly stabbed the giant in the gut and, with the vampire closing in on fast, escaped with a teleportation spell. The Knights of the Dragon cannot care what they don't know about. They had sent me only for the giant after all.
Skyrim and Oblivion haven't been able to replicate this experience. The saddest part is that Bethesda doesn't even try. The present technology and Bethesda's massive resources would easily allow them to create a compelling dungeon crawling experience with all the hallmarks of Daggerfall that I've described, and in fact improve it. How sad it is that verticality was better used in Daggerfall than in Skyrim? They had all this experience to build their games on and they let it go. Also, in the mid-90s, combat couldn't realistically be simulated any better that it was. Now, those limitations are gone. Hell, even Skyrim's current combat system would be enough for an excellent game, if the dungeons were more compelling. I'm in the camp that supports the transition from Morrowind's stat based system to the action based one of Oblivion and Skyrim. You can only go so far with a stat based abstraction, when you try to simulate the rest of the game. Archery especially was dumb as fuck in Morrowind.
Comparison between Daggerfall and Morrowind isn't as easy. Morrowind doesn't have secret doors, elevators, switches (IIRC) and the dungeons don't require nearly as much thinking. However, its much more advanced technology allows it to use elevated surfaces and underwater areas better to create SECRET AREAS. Morrowind is often criticized for its small dungeons, but I think this criticism is unwarranted. Some of those dungeons are actually quite large and have very good loot hidden inside. The player will simply have to explore the world to find them. Think VVardenfell as one big dungeon and Morrowind's superiority becomes apparent. Obviously, the worldspace, worldbuilding (the dunmer culture), plot, etc, are miles ahead of Daggerfall. Morrowind is a better a game on the whole, but it has some glaring flaws, some of which is shares with Daggerfall. It's TOO EASY, exploitable, combat is boring, and many (most?) quests are total fillers.
Interestingly enough, Daggerfall is actually a very casual experience. It's very easy to just pick up the game, complete a 20-30 minute dungeon crawl, and put it down. I couldn't ever imagine playing this hours and hours in one sitting. It's just too repetitive for that.