Josh - I honestly think that you've lost sight of the player/character distinction that is the heart of a game being an RPG vs just a game. Here's what I think an RPG requires: A brain transplant, and a world that's not a vacuum. I've mentioned numerous games as examples to better illustrate what I mean by both of these characteristics.
Part 1: The brain transplant
In an RPG, your character is a person in a world. His characteristics are set out by his statistics, and the way that those statistics impact his interactions with that world's rules of physics, standards of behavior and attractiveness, etc. The player essentially has his brain placed in the character's body, and has to abide by that character's physical abilities. (note, its really more like you become the pilot of his brain. All the data is still filtered through the character's mental statistics, but you give the orders based on that data.)
In a standard game, you just put on a mask. Regardless of how well the character could aim, run jump, dodge, etc, it is meaningless, because the player's ability with a mouse or controller is all that determines how the character fares. This is playing a role in a trivial sense, but all you're really doing is playing yourself, with another person's appearance.
And blended games like Oblivion are not any better when you look at the marginal cases. People tend to focus on the unskilled character who hits based on high player skill, but I think the bigger problem is the high skill character that misses based on low player skill. Many people are forgiving in the former case, because its fun to succeed. But how about in the latter, where a character with a heavy stealth build is always detected because the player (who wants to play as a stealth character) is simply not skilled with a mouse or keyboard. Ironically enough, this type of hybrid game restricts a person's ability to assume the role of a character different from himself, because the player isn't enough like the character that he wants to build. If you insist on taking the main characters in Splinter Cell or Thief as archetypes of the stealth based rpg character, then how can you respond to the Thief player who desperately wants to play the game in a stealthy way, but can't because the character is the only member of the character+player team who knows how to stealth. What I'm basically driving at is these types of games are only fun for people who are good at action games, and there may be little or no overlap between that group and CRPG fans. They're certainly not mutually inclusive, but its equally clear that the class of people who like action games does not include the entire class of CRPG fans.
Part 2: The Vacuum.
Part of being a person is making choices, and part of being a person who does not live in a vacuum is having those choices impact that state of the world. When Fallout 1 and 2, Arcanum, KOTOR 1 and 2, BG 1 and 2, and many other PC RPGs give you choices that impact the content in the game, they effectively tell you that your character is a PERSON, and that as such, he can impact the world, for good or for ill. If you take this away, then the choice that you make (moral or otherwise) in the game are no different in character than facial customization at the start of the game: they're merely aesthetic.
In Fallout, people would react to a child killer by saying "He's a terrible person, and I want nothing to do with him, based on his immorality." Where as In Oblivion (if you could be a child killer, which is impossible) people would say "Oh he's a child killer. Let me treat him like everyone else." To show the absurdity of this, let's consider a parallel reaction, based on your character having a big nose. In Fallout, people would probably say "He has a big nose. Sure he's a little ugly (so I don't want to sleep with him) but I'll treat him like any other human being". In Oblivion it would be "Oh he's got a big nose. Let me treat him like everyone else." In Fallout, choices can actually be moral, because they bear consequences, including social disapproval. In Oblivion, all you can really do is make choices about what type of nose you want to have. The Arena champ's nose. The worst mass murderer in history's nose. All choices that impact you, but only in superficial ways.
What can we conclude from Oblivion's 1) emphasis on player skill, not character skill 2) complete lack of meaningful choices and 3) its huge success in a market populated with players who have probably never even played a PC RPG (xbox 360 owners)? That Oblivion does not represent the evolution of the RPG at all. It represents a successful way to appeal to an action oriented crowd with no experience playing the stat based simulation RPGs. In other words, Oblivion is a great example of how an RPG maker can abandon their genre, for a hollow commercial success. Oblivion is "Selling Out 101."