You know, I'm wondering if anyone has noticed the parallels between this minigame and the lockpicking method in Thief III? In that game the lock was a big ol' circle and you simply moved the pick around the circle until it started shaking and then finally popped one of the little pistons up. Rinse and repeat. No challenge, easily mastered, very unrealisitic. I mean if I could reallly break into locks by swirling a lock pick around, well then damn, I'd be a klepto.
Unrealistic, sure, but at least it was an appropriate abstraction. Feeling around until you hit the sweet spot and jiggling until it yielded. More complex locks had more "tumblers" to deal with. Compare that to racing against the clock to respond to emotes, and it's far more appropriate as an abstraction.
But, as you say it was easily mastered, and offered no challenge. It served as a time sink, to keep you at a door long enough to be discovered, but hey, so did the original lockpicking method from Thief. And that's pretty much how I expect the persuasion in Oblivion to be, a timesink. But also within the context of an RPG, something that's likely to override character skill.
Oh, and another thing, anyone else notice that both forementioned minigames are tailor made for an analogue thumbstick?