As much as the idea appeals to me, I think that those that complain about Skyrim being too "bleak" would hate the idea because to my knowledge, Orsinium is like Skyrim but without the plains...
I think it'd be an interesting place to set it (Then again, I think anywhere that hasn't been covered yet would be interesting), I don't care where it is, JUST GIVE US TES VI!
I'd personally like to see the Summerset Isles. In Skyrim we got to see a frozen province trying to liberate itself from the Empire. It'd be nice to swing back in reverse and experience a former province potentially being reconquered. We also experienced massive anti-Mer and anti-magic sentiment in Skyrim. It'd be interesting to see that reversed a bit, where playing a non-magical character would be grounds for being mistrusted or underestimated.
My problem with Orsinium is that it could end up with a setting and story too similar to Skyrim. Orcs are basically to the Mer what Nords are to man: The tanky, warrior-y blacksmith-y ones. I'm not saying that Orcs are a bad race, but I think they may need to wait for the game lore to evolve a little before Orsinium would be a big enough setting for a full Elder Scrolls game.
...Unless Bethesda follows its trend of cutting down on the size of the map, in which case a tiny non-province may look pretty promising.