"because they had to make a whole new system to make the game, they didn't want to use their old system for Oblivion that is what.. over a decade old?"
Bare in mind that what I am going to say is based solely on rumour, conjecture, speculation, and some wishful thinking...
I heard that Beth brought in Arcane Studios peeps for this "new engine"; (they were the ones responsible for creating 'M&M: Dark Messiah' on Valve's Source in 2006) because, as you mentioned, Beth's engine was ancient. I really hope this is true, because (and not limited to) 'Dark Messiah' had some awesome gameplay mechanics that have been sorely missing from all RPGs. (Thief series notwithstanding).
Such as:
-the rope-bow (see Youtube),
-freezing the ground so as to unbalance your enemy,
-climbing ropes/chains & ledge grabbing,
-swordplay w/power moves based on saved adrenaline,
-physics-based environment (use your bow to shoot the rope holding that giant precarious chandelier and watch the baddies fly!),
-real fire (!!! transfers from wood to NPC or wood to wood),
-NPC reactions-> to sneaking (taken aback upon finding you and momentarily staggering) and injury (try to run when overpowered or gravely injured),
-actual moves when backstabbing and/or sneaking
-last, but not least-> the kick (kick your sword-wielding foe into that Iron Maiden, or that pesky Goblin off a cliff)
Come to think of it, I'm gonna play it again just to get rammped up for Skyrim!
If you've never played Might&Magic: Dark Messiah, you owe it to yourself to check it out.