I mean, it did have it's flaws but I don't think it was that bad, however if you really did it wrong you could totally fuck up your character. Like if you leveled up non-combat spells too early you can't defend against any of the enemies.
But even now it's still flawed in it's own way. You can now max out combat stats without ever doing any combat. Get 100 strength and endurance without killing a single thing.
These games are so fun for the bugs and exploits though so it's not really a bad thing.
It was pretty bad because it punished you for leveling. It was much easier staying level 1 because enemy scaling is busted. It forced you to play very specific way especially if you wanted to play on highest difficulty. I still remember stupid mud crabs 2 shotting me while being almost unkillable unless I played like cheeseball using op spells or lured them to city watch. When you have to rely on cheese or bugs to beat the game it's a sign.
Don't get me wrong the game was incredible, the bugs and the unintentional humor is what made oblivion a masterpiece. But the leveling was anti rpg.
Thankfully mods fixed it and Bathesda clearly redesigned it because they realized it wasn't a good system.