We have seen this problem on thin barked oak species such as water oak and other red oaks occasionally, but the "disease" has never been properly diagnosed.  Most of the time when I have observed these symptoms, the trees did not to appear to be suffering any negative consequences.  However, I do not have enough evidence to eliminate the possibility that it is completely benign and will not eventually lead to problems for the tree.  If you would care to take the issue to the next step, you could submit a sample to the Texas A&M AgriLIfe Plant Disease Diagnostic Laboratory in College Station.  For a small fee, they could exam the tissues and determine if there are any pathogens associated with the tissues.  You would need a piece of a branch large enough that clearly has some of the "scaly", abnormal tissue.  In the meantime, it would be helpful if you could submit some additional images with the entire tree in the picture, as well as some of the smaller branches you referred to.