Lacks the ability to build the house from the ground up - this would have been especially great use of crafting skills.
Lacks the ability to add modular wings/rooms/towers/cellars or demolish these - even some pre-existing paintings cannot be removed and paintings placed over them to hide them.
Due to item limits building with stone blocks or other materials is severely limited in scope and creative potential.
Colour - cannot paint my house or change the colour of the stones or materials.
Towers - have limited view due to high guardrails. If I want to risk the life of myself or my visitors by removing railings for an unobstructed view I am unable to.
Almost no purpose to visit my house once I have finished decorating it since the house adds no unique quality of life or practical use, and yes this includes the practice skelly (console users may find this useful for DPS but that is due to ZOS not providing them with the requisite simple UI option to display DPS).
Cannot install a stablemaster to park my alts for training mounts, so they remain parked next to stables in regular open world cities.
Cannot place models of my other characters.
Can't place existing unique fish or unique monster trophys (remember the trophy's achievement list of collectibles, ZOS - yes these were once a thing)
Can't make written signs or item frames...OK I'll stop with the minecraft inspired suggestions now before I get out of control.
Cannot use chests, they should at least open and close even if we are not allowed to put things in them.
No armour stands, even as craftables. Even if we can't place our own armor a replica armor set for motifs would be nice to display known motifs - sort of like a tailor's display room (like in thieves guild quest).
Target skeleton (even the heavy one) gets knocked down whereas there is literally no boss in the game with 6m health which can be knocked down with a simple crystal frag. As you know, some skills do more damage to enemies knocked down which influences the DPS results.
Target skeleton is not customisable in terms of health/armour/resistances and so is very limited in terms of usefulness for testing purposes other than a baseline DPS for guild elite vetting purposes or epeen management.