How so? The Empire has the better part of a continent to feed and food conjuration spells are nowhere in sight (and even if they were, would your average peasant have access to them?). If the games are any indication, then there are plenty of subsistence farmers, but there's still numerous cities to feed, to say nothing of the Legion. So, there would seem to be a motivation for large-scale agriculture, which tends to lead to technological advancements in the name of efficiency.
And yet, there doesn't appear to be a single horse-drawn plough in the entirety of Tamriel. Odd.
I would think that is due to laziness/not willing to put the time in rather than a lack of technological advancement. Technology in a fantasy/sci-fi universe such as TES is not as it is in our own world due to presence of magic and other fantastical/science fiction concepts. You can track magic advancement however. The schools are forever being reformed. For instance, in Skyrim there is no Mysticism school (however, we can presume this a game mechanic rather than a piece of lore). But you cannot compare or criticize a lack of advancement in comparison to our own world as it is literally nothing like ours. And I think you can see a very clear difference in technology used by the Atmoran Nedes and the 4th Era Imperials, and with Ayleid technology juxtaposed next to modern Altmer sun-birds, made of solidified sunlight with trebuchets that fire pure aetheric fire...
I completely agree though I had more a problem with the lack of good infrastructure in the Empire. How could world conquering legions work without a reliable way to travel?
Imperial roads (I wouldn't use Oblivion as an account honestly, I mean, look at the Imperial City...). And an amazing navy. Also mages can generally help with travelling, for instance I remember reading somewhere that Imperial battlemages made water for the soldiers to drink or something along those lines. And for mages, don't forget magical teleportation, and don't forget other various foreign methods of transportation, such as Silt Strider etc.
And,
Whoever killed off the Dwemer did the right thing.
They're not necessarily 'dead', and Kragenac is responsible for it, so they sort of eradicated themselves.