I don't mind level scaling. I mind bad level scaling.
The levelling system of Oblivion is a very complicated thing. There's absolutely no way to assume what has advanced in a player level to level. But they still pumped up HP and damage for enemies anyway.
As a stealth specialist, stealth is what would be the vast majority of my levelling. This only helps so far. I could sneak up on enemies in Oblivion, but all I'd get is the sneak attack. Then creamed. My sword and armor didn't go up nearly enough each level to manage.
And then after a while, it'd be manageable again. After I grind out sword and armor. Until late game, where my stealth became so high they wouldn't detect me even after the sneak attack. But it still took 7 or 8 max multiplier sneak attacks to kill a light armored bandit.
There was no intelligence to the scaling. If you're aiming to make an experience that provides dynamic challenges in response to player advancement, you need to pay attention to the details of player advancement. Sin Episodes: Emergence taught me that, despite it's bug. If the player had too much ammo, it dropped less ammo. If the player had too much health, it dropped less health.