While C&D letters are never a nice surprise, Bethesda is right and Notch is wrong.
Given that these both involve computer games and computer games in the same or similar genre, it's entirely reasonable to think that the average consumer would be confused at the titles. (And I have trouble buying the line about the Google search. Even now, "Elder Scrolls" and a link to Bethesda's website shows up in the top 10 results, filter bubble be damned).
The article lacks detail in a way that reads as inaccurate. While it's true you have to protect marks from becoming generic, this involves defending them against all infringers, proving that you've done so, and also proving that you've used the mark in public within a certain amount of time. Which means that Bethesda is only doing what it's required to do to protect their franchise from this exact sort of situation.
While companies like Activision/Blizzard and Ubisoft do things that are of dubious benefit to their customers, I feel like in this case Notch is riling up a large fanbase and positioning this as big-corp versus the little-guy.
This is disingenuous on two levels. One, ignorance and entitlement aren't excuses (just ask Andy Baio and his $35,000 lesson in copyright fair use). Two, Notch is the public face of a company that, by all accounts, is worth millions of dollars.
It's time he started acting like it, educate himself, and put the babe-in-the-woods routine to rest.
PS: I'd also be very surprised if a trademark was granted on a generic dictionary word like "Scrolls."