The leveling system in Oblivion did suck.
Walk into a cave at first level ... fight a 1st level goblin or two.
Walk into the same cave at 30th ... fight goblins the same level as you with Daedric armor and weapons.
I have no idea where they got the cash for the armor and weapons.
If you set the game on the hardest difficulty when you started, you were just a meat bag waiting to have the crap kicked out of you ... by some NPC with no armor or weapons to top it off.
I laughed so hard after starting it on most difficult, when my toon got beaten to death at my first bandit encounter. Bandit had no armor, no weapons and just fists. I never even hit him before I was pushing up daisies.
AHAHAaaaa.... gasp. Too funny.