I believe the belief about the Nerevarine kicking the Empire out of Morrowind is only an ashlander superstition.
That's the impression I got from the main quest, when looking at the actual full version of the prophecy, I don't see anything saying that the Nerevarine would drive the Empire from Morrowind. I think the Ashlander's just interpreted it that way out of wishful thinking.
Even so, I've wondered about this myself. Was he aware of more than he let on? I can't see him knowing the full version of the prophecy, though, after all, if he did, there's no reason he couldn't have just included it in the package to Caius Cosades, that would spare the need for all that running around asking informants. I can only assume that the Emperor just counted on the Nerevarine choosing not to drive the Empire out of Morrowind, after all, being an outlander himself, I can't see the Nerevarine having any motivation to do that. Either that, or the Emperor believed that Dagoth Ur would become a major threat not just to Morrowind, but to the rest of Tamriel as well, if that is the case, he may have felt that the possibility of Morrowind gaining independence was a risk worth taking for the sake of the long term well being of Tamriel. Perhaps the Uriel Septim just saw things in larger terms than his own political interests.
In the end though, the nerevarine did drive the empire out...sorta. Not directly, but indirectly with the destruction of Red Tower, the empire collapsing after the OB crisis, and Red Mountain blowing its top after the MoT dropped.
That's more like driving EVERYONE out, though. I don't think having their homeland destroyed by a volcanic eruption fits very well with the liberation from Imperial rule that the natives hoped for.