Not dead so much as collapsing. Think the fall of Rome, it was gradual eventually leading to the Byzantines.
Exactly.
It's not like the society, culture, and civilization have been destroyed or even damaged; The collapse of the Empire is mostly political and very gradual.
Also, the Empire has died before, and they're far from the only advanced civilization on Tamriel. There are libraries and the like all throughout High Rock and Skyrim, with at least two Universities in Skyrim.
I doubt we have to worry about too much loss of literature.
I AM very excited to see what literature we'll
gain, however.
200 years IS a pretty long time, and extremely exciting things have been occurring in the that time. The destruction of Vvardenfell alone is interesting enough to write a full length book about; not to mention the rise of the Medean dynasty and its fortunes, the Infernal City, and heavens only knows what else has been going on.