It's more that they find the Argonians' retaliation was not unjustified. From their perspective, for millennia nothing stopped the Dunmer from coming to Black Marsh, kidnapping Argonians from their home, then taking them in chains back to Morrowind. The Argonians couldn't stop it previously and Morrowind was too strong for retaliation. Not even the Empire could stop it. When the Empire withdrew and the Dunmer were down on their luck, the Argonians were finally able to put an end to it once and for all, as well as the chance for many former slaves to get some payback for the injustices they suffered.
Slavery had already been outlawed for quite a time by this point though, hadn't it?
So I suppose, in a real life parable, it would be "just" for the African continent to inflict similar acts of genocide on the guilty European and American states, in the present day? Slavery and mass-murder are the two worst things a nation could possibly do, but one never justifies the other, both are awful, right? Of course this is a fantasy world and nothing to be taken that seriously, but to me the whole history of Argonia and Morrowind reads like a list of tragedies, I think it's meant to. The Argonians never deserved slavery and the Dunmer did not deserve to be almost wiped out by the the events of the Red Year, and to lose their homeland that was so sacred to them.
On the plus side, it makes a Dark Elf a very interesting character to play in Skyrim, with lots of juicy potential for an emotive back story.