Dagoth Ur would remain immortal, while the Tribunal became weaker. The Blight would devour Vvardenfell, all the Dunmer would become his slaves and everyone else (all the Outlanders) would be killed. This is basically Dagoth Ur's goal.
There are mods that attempt to address some of this scenario, although not to the point of erasing the Empire from Vvardenfell. (that would be an enormous mod.)
I doubt Dagoth Ur would ever destroy the entire Empire, since it spans the entire continent of Tamriel. He would likely be content with just reigning over Vvardenfell and the Morrowind mainland.