I agree 85 percent and disagree 15. If you need fast travel in your RPG, you're doing it wrong. This is one of the major flaws, in my opinion, of Oblivion. The only way to not use fast travel is to use a horse, because the atmosphere and landscape are about as exciting as a stale saltine cracker. Sure, there's of salt there to keep your interest up for about 1.3 seconds, but the resulting feeling is mostly a resounding, "Meh."
Contrast that with Morrowind, where every inch of the world is highly detailed (at least for 2002) and the atmosphere is an endless deep void that you can get lost in for hours. You start off on a quest and three hours later all you've done is wander around the world and gotten lost in a sand storm. The silt striders were there, of course, for player luxury more than atmosphere, but they weren't a crutch as they were in Oblivion or in some instances in Fallout 3.
Fallout 3 has a much more rich atmosphere and landscape, making fast travel much more of a luxury for players strapped for time than a necessity like it is in Oblivion. While I would have preferred a less immersion-breaking mechanic (such as a motorcycle or a car a la Fallout 2), I found myself many times taking the long trek to a location rather than using the fast travel.
With that said, however, I believe that there needs to be some sort of 'fast travel,' for those players strapped for time. At my age, many of my friends are getting married, having children, et cetera. Many of my friends who used to be gamers cited their main reason for not playing an open-world game like Fallout 3 was that they didn't have time.
With their full time job and their children, they don't have time to sit down and play a 4-hour session of one game. Most of these friends in question loved Morrowind, and they love open world RPGs and most kinds of RPGs in general. And for these types of players, I think designers do them a disservice if they do not allow them a time-cutting mechanic like fast travel. Because for most of these friends, the only way they could enjoy Fallout 3, is if they took close to a year to complete. They don't have the time to drop 150-200 hours in a game within a 3 month time span. Heck, I barely have enough time to do that, and I'm not married, nor do I have children.
So while designers should not ever use fast travel as a crutch/excuse for lazy design (as I think they did in many areas of Oblivion - and even, dare I say, a few areas in Fallout 3 and Fallout New Vegas) I think it is a mechanic that needs to be included if the designers do not wish to exclude those players who do not have the flexible time schedule of high school students and college students. Otherwise, gamers who are having families of their own will not be able to enjoy them to the same degree.