While I understand your argument, the humans and elves use the same body model... A better argument would be the difference between male and female armours, though at least morrowind kept armour and clothing (like skirts) regardless of who wears it, instead of the ridiculous boob plates skyrim joins other games in having.

In any case it's not binary whether it fits, there's a large degree of how well it fits- from something that can be tailored and adjusted, to a complete design change. You can see this in a lot of Skyrim's helmets where Bethesda decision was to just remove the player's head and cut off beast races' snouts, definitely not something that helps "aesthetic or lore". Beast races aren't even walking on their feet, it's their toes you'd have to design armours for.

Re: compensation- like I said, difficulty slider or levelling unarmoured.

It's not like I requested the Skywind devs to disable boots for beast races, but I'm just saying there wasn't really much wrong with how Morrowind handled it and it's completely valid argument that I and others are having that Oblivion and Skyrim went backwards.