What motivated Beth to release Daggerfall and Arena as freeware in the first place? They could have milked who knows how much money from GOG sales.
I am guessing they did the right thing.
Guy who played Oblivion gets curious and tries Arena and Daggerfall. Attachment to series becomes stronger, even if he does not completely like the game. Guy who played Oblivion now purchases Skyrim on 11/11/11 and also purchases Morrowind, which he had earlier never tried. It's that simple.
Sure they lose out on sales of Daggerfall and Arena, but they gain big on the Elder Scrolls brand. They impress on the player that this is a two decades old series with a vast lore behind it, and that each new installment is not to be missed. [It's called loss leaders and cross-selling. My parents do this all the time, selling products at a loss, because people will purchase them with other goods out of increased interest.]
Why else did so much of Morrowind lore make it to Skyrim, even though much of Morrowind lore didn't make it to Oblivion? Bethesda must have seen that Oblivion boosted cross-sales of Morrowind. They then knew that something of that Morrowind promise must make it to Skyrim. So they include dwemer ruins and whatnot. Daggerfall and Arena boost that cross-selling momentum.