Indeed it would. I guess the biggest difficulty for Bethesda wouldn't be creating such a large game area, but to fill all of it with content.
What they could do is get all the other games content thay have and just add it to those areas. It would be like a graphics update to Morrowind, Oblivian and Skyrim, but have them all in the same game. Obviously some bits would need to be revised like the main quest line, but they have loads of stuff already available from the older games.