And of course there's the old, old argument, even if the Dwemer did leave guns behind, who would be daft enough to risk blowing themselves up experimenting with gunpowder, when you can pay a guy in a shop in your town to teach you a fireball spell, which unless you cast it on an enemy with reflection, is perfectly safe.
That fireball spell is extremely weak. Using your logic then bows would also be obsolete. HELL, even swords would.
You need to be a powerful mage able to cast powerful fireball spells to not need weapons.
The black wood company had a form of factory equipment. Perhaps black smiths could have such a equipment. I wouldn't have a problem with steam power providing it is used in a subtle way. If I see a steam engine I will cry.
What power could steam provide if not in an engine? Steam engines aren't that complicated http://science.howstuffworks.com/transport/engines-equipment/steam1.htm
All you need to know, is that 1kg of hot air/liquid takes up allot more space than 1kg of the same cold air/liquid.
As for the guy who said primitive muskets svck: No primitive muskets were not operated by 2 people. They were extremely light and primitive.
Besides, dwermer muskets would be much more advanced! We got magic and whatnot.