User blog comment:Zelron/The Elder Scrolls V: Dragonborn rumors (Imbedded deep the secrets sleep)/@comment-5380212-20121018030449/@comment-3492791-20121018065202

Well firstly, Vvardenfell no longer exists. It got blowed up.

They choice of setting was likely due to, firstly logistics. It's nearby, and being an island it has very specific natural boundaries to enclose the space. Secondly, they probably wanted to go the Shivering Isles route of an island, but probably thought another trip to Oblivion may seem like too much of a cop out.

While the island itself may resemble Skyrim, don't forget those busy little Dunmer have moved in. The settlements there have the opportunity to show more of Morrowind's architecture over basic Nordic mead halls, providing a little variety.