i have been loyal to the empire in each of the TESs. reasons: the nords don't like magic. doubt that they could defend themselves against a full assult by The Aldmeri Dominion. and many nords surport the empire. as do many red guards.
the empire isn't just for the Cyrodilics or Imperials. Andel Indarys is the http://www.uesp.net/wiki/Oblivion:Count of http://www.uesp.net/wiki/Oblivion:Cheydinhal who happens to be a dark elf. many non-cyrodilics hold position of power in the various factions throughout Cyrodii.
and any race that wishes to control Tamriel will have to control Cyrodii because of it location. an empire seat of power will always be in cyrodii. though Cyrodilics may not be the fraction that holds the power.