I thought The Infernal City was terrible and am pissed that its canon.
<3
Although I did like Sul, he was at least a character crafted with depth. Coo was a cool bit of dwemer craftsmanship. Vvardenfells demise made the Dunmer, at least for me, more realistic. Civilizations are bound to decline, it is the nature of things.
as for the destruction and invasion:
No, I don't think the Dunmer deserved it, not all Dunmer were slave owners/dealers/profiteers. Dunmers are also not the only race with a condescending attitude.
Likewise, not all Argonians are upstanding citizens of the Empire.
It was more of a political/religious opportunity for the Black Marsh to invade Vvardenfell and MW. I also don't think that Argonians were the only race that masterminded it, nor profited from the invasion.
Vivec abdicating, the MInistry of Truth descending, and the Red Mountain exploding were acts of god and nature in the Argonians favor. The fact that these acts occured as a later consequence of the Nerevarine's well intentioned acts that were to save the province Morrowind is ironic. Moral of the story, don't [censored] with Azura.