I said this in the Skyrim thread already, Morrowind was by far the best of the modern TES games in this respect. The main baddie was holed up in his stronghold and he had no reason to come out, it was up to you to go to him. His presence outside the Ghostfence was limited, hidden, and often immaterial (i.e. spreading disease, driving people mad with nightmares, that sort of thing). Oblivion and Skyrim both have invasions as the driving force behind the plot, which just doesn't work with their "do what you want when you want, no time limits, no pressure" design philosophy.
Now M&B, that's the right kind of game where an invasion could drive the story! You could have an enemy force actually doing ****, taking cities, conquering territory. More to the point, you could have the same overarching goal of "defeat the invasion" as you do in Oblivion and Skyrim, but you could do it your own way. Perhaps you've invested a lot into Persuasion, so you could be the diplomat that negotiates peace between the various kingdoms and helps them to unite against a common foe. Perhaps you're a rich merchant, so you can use your money to bribe the right people to weaken the enemy, or hire mercenaries to join the fight against the invaders. Perhaps you could find a long lost relic, like the sword of some legendary ruler or something like that, to inspire the people and boost the morale of the armies. The possibilities are endless, all it takes is a little imagination. The point is, the main quest in such a case wouldn't even need to be scripted. Just give the player a goal and a whole bunch of different things to do that contribute to it somehow and he'll make his own story. And if you just want to run around hunting bandits while the invasion force wins, well so what? You can continue doing that just fine under the new rulers.