The Elder Scrolls IV: Oblivion implements a global levelling system that ensures all characters, loot or weapons in the world are within the same level range as the player at any time. Therefore no area is overly dangerous for you to enter and all loot and weapons located are proportional to your level. The idea being that you are free to explore the world free of the fear of encountering an enemy you have no chance of surviving combat with.
The problem of such a system is that it removes the potential for anticipation, for yearning; it rarely feels like you have earned anything. There is never a situation where the you find a shop stocking a rare and powerful weapon that you “just had to have” but can’t afford, or where you could find an interesting looking dungeon you desperately want to explore, but that you know will be very dangerous. Playing Oblivion you can be left without the motivation to go away and earn the money to buy that special weapon, or to improve your character so that you can finally enter that dungeon.
Different weapon types only become available when you reach the required level, but by that that stage they are no more effective in relation to the creatures in the world than the weapons available at previous levels. When you are free to explore all the dungeons at once nothing feels particularly challenging. You never have to wait for anything so nothing is ever “worth the wait”.
When everything has the same value, nothing has any value. That’s what the levelling system Oblivion is wont to do, make everything valueless.