Yeah, you're not wrong that Oblivion alchemy is way more busted than Skyrim's, but I'd push back a little on the "design is broken" take. It's more that Oblivion's difficulty scaling is just fundamentally different.
In Skyrim, enemies scale with you but cap out around level 40-50 depending on the type. Oblivion scales everything with you, including loot and enemy stats, which sounds balanced until you realize that player-crafted potions don't scale. So at level 18, you're hitting enemies that are tuned for level 18 combat, but your Damage Health potions are the same ones a level 50 character would make. That's the exploit.
The way the game "expects" you to play alchemy is more like... it's a convenience tool. A Restore Health potion tops you off between fights. A Fortify Strength brew gives you a temporary edge. But the fact that you can just nuke everything with Damage Health potions is kind of on you to self-regulate, if that makes sense. Some people just don't use them, or use them sparingly. Others crank the difficulty slider.
If you want to keep playing without breaking it, honestly just don't make Damage Health potions, or use them only on actual bosses. Or bump the difficulty up a notch or two - Oblivion on Hard is closer to Skyrim Normal than Oblivion Normal is. The game's still fun if you set your own rules about what's fair.
