When Caius is recalled to Cyrodiil during the main quest, the nerevarine prophecies were still unknown. Maybe afterwards they realized the mistake they made in sending prisoners to Vvardenfell.
Edit: And then, well, you were only in contact about the prophecies with the ashlanders, who simply wanted it to be fulfilled.

In the early Uriel Septim's eyes, the Blades were messengers/diplomats made of awesome sauce.
When Caius Cosades defined what the Blades were, they were the "eyes and ears of the Emperor" (and sometimes, the Emperor's skooma addiction).
Then Jauffre came along and claimed they were the Emperor's bodyguards.
Now there's this Max von Sydow Blades guy who claims they were always the military arm of the Dragonborn.

Rather than saying Caius was an idiot, I'm hoping for a coherent definition of what they actually are. I definitely prefer the first two definitions to the latter two, but for the new game, something that doesn't feel like a retcon would be nice.

That's what the emperor thought, but it doesn't make it necessarily true. The game let you betray your "friend" if you wanted.

But the emporer still would have trusted him, or he found out Caius screwed him over and decided not to killhim for old times sake and instead banished hi to Morrowind, and then recalled him when things got hairy back in the IC

The way I see it, the Blades act how the Emperor wishes. If the Emperor told them to collect old artifacts from Vvardenfell, they will. If he tells him to investigate a conspiracy, they will. If he tells him to defend him from assassins, you bet your infinite pocket of gold they will.

The Blades don't do just one thing. They do many things.

It's not unusual at all for a head of state's personal guard to double as an intelligence service (either because they were formed from the intelligence service, who would have been able to provide protection everywhere when the head of state traveled, or because the head of state trusted them more than the regular intelligence services). And as the emperor's personal guard, the Blades have been the military arm of the Dragonborn by default for a while.

The hero of daggerfall is dead.

The result of the Warp in the West was that all possible events happened, each of the possible kingdoms got the numidium, the orcs got the numidium, Mannimarco got the numidium, the emperor got the numidium, and so did you. One of the possible endings was trying to activate the numidium yourself and being killed by it. He disappeared after the end of Daggerfall because he's dead.

And Caius didn't send you to morrowind, Uriel did.

Having Dagoth Ur wipe out or enslave everything that is not a Dunmer would have been a better solution?

Call them idiots if you like, but personally if I had the ability to select one out of countless millions of people who was the only person capable of uniting an entire nation of rebellious people under one house subservient to mine own; who could stop a demi-god from creating a true god out of the heart of an insanely powerful being which the empire already utilized through numidium at one time, and who is also currently spreading an incurable disease that turns people into semi-sentient, immortal servents of his own rule; I think Ie'd jump on it. The Empire OWNS the elderscrolls remember they knew damn well what they were doing, but sometimes you have to pick your battles and try to minimize losses.

Either way, we were in trouble, we just chose the lesser evil. We could fight back the daedra, we can't fight back a god.

A, you fought back Dagon in Oblivion...
B, and I quote "I am a GOD Nerevar! You cannot kill a god."
C, you fought back Dagon in battlespire as well
hmm...

Dagon could not have been defeated if it wasn't for Martin. He would have utterly destroyed Tamriel. Dagons avatar was only defeated because of the avatar of Akatosh. In past events when Dagon was beaten it took the combined efforts of the Tribunal while they when they where still all-powerful (and Sotha Sil still lost his legs in the battle) and later some weapon that contained the essence of Dagon in Battlespire.

The thing is that a mortal can not combat Dagon and expect to win without some kinda divine intervention.

As for Dagoth Ur, you could not kill him as long as he still had the source of his godhood.

I always thought that the Blades were charged with finding the mantella. Guarding Sep and his kin and cronies were secondary. Life has a way of providing distractions.
Or maybe that's just me.

200 years have passed between Oblivion and Skyrim. The Blades may not have even known about Sky Haven Temple.

I'm sure there will be some explanation of why these things happened.

Explain to me why adding conditions makes the fact that you still fought him off any less prudent please?

As far as I understood it you can't vanquish Dagon by any mortal means.

To be fair, having something on that level shouldn't even be intractable as an enemy at all in a game like Oblivion. They should have just made a prop out of him like they did with the Akulakhan in Morrowind.

Except the hero of Daggerfall was not Imperial.

Who or what said he couldn't have been?

That would have been interesting, but really thats Dagon. From my understanding Lorkahn IS Akatosh who IS Alduin as well (akatosh/alduin time + lorkahn space) and I personally have always seen mundus as being Lorkahn. I really like the idea of trying to stop a world from consuming itself, but it probably won't play out like that. Though I think we can both agree the power-ranger cutscene at the end of oblivion should never be repeated.

It's not the Blades fault that they couldn't have stopped the events from coming. The Elder Scrolls predicted it meaning that it was suppose to happen. I'm just curious as to how the Blades a respected organization that was supposes to guard the Emperor is now on the brink of extinction.

Dagoth Ur was fated to fall at the hands of the Nerevarine Reincarnate. Did The Blades use the Prophecy of the Nerevarine sure they did but it was fated to happen meaning you can't really stop it from happening.

Dagon was going to fail and that ultimately led to the events that released Akatosh/Alduin from his Pact with St. Alessia. He should have learned his lesson when Jager Tharn failed 40 yrs earlier but you can't blame Dagon for trying again to take over Tamriel as he is the Daedric God Of Destruction.

I wouldn't blame the Blades or anybody for the current situation that Tamriel/Skyrim is probably going to be put in. Hence that's probably why Talos/Ysmir is going to be an important part in stopping Alduin/Akatosh from destroying Mundus or Nirn and creating a new plane of existence which is really bad because then everybody will probably die. Talos is a human Divine unlike the rest of the divines minus Arkay who is also a Human Divine. That basically means that Talos cares more about the people then the other Divines do.

If an Elder Scrolls predicts something you really can't do much to stop it from happening.

Stop and think for a second.

You're driving (or being driven) and you see a sign that says "road closed due to construction" and "detour ->".

So if you ignore that sign and keep driving assuming that if you don't believe the signs then the road will be open? It won't be. The mural was a symbol foretelling of the coming Alduin, and if Red Mountain influences his coming who is to say it is directly responsible for his coming. The Elder Scrolls (actual scrolls) are tools to see the future, but they are not absolute. That is why the Warp to the West happened and you could break the fate of the world as the Neraverine. Besides, Caius Cosades was just doing his job. He listened to the Emperor and helped the Neraverine. It's not like he was directly responsible either. Another thing Akulakahn was almost complete, and which would the Empire have to worry about more. A god which has the power to rewrite the world now, or a god which has the power to rewrite the world in 200 years?

Because Imperial was not an available race in Daggerfall. S/he was also not an Orc.

Folks, this is a prophecy. Members of the Cult of the Ancestor Moth take decades to even start to be able to comprehend a single scroll, and even then it's just interpretation. After events are fixed it becomes clear, sure, but that usually is too late to completely prevent the negative consequences of the fulfilled prophecies.

Are you absolutely sure the Nerevarine and Cosades helped fulfill the prophecy? The only thing on the wall is Red Mountain. This could be interpreted as the rise of Dagoth Ur, which is also (obviously) an event in TES III. Cosades/The Nerevarine didn't facilitate that, they stopped him. If the mountain on the wall prophecises the rise of Dagoth Ur, then the actions of the Nerevarine made no difference, the sign was already a fact when he was sent to Morrowind. So why are you so sure that the carving is related to the FALL of Dagoth Ur, and not the RISE of Dagoth Ur.

Exactly. In Morrowind, they were just acting under orders from the emperor. In Oblivion, they're protecting the emperor.

They're all just following orders.