Reasoning:
1) I know that both sides in this war suffered tremendous losses. The "Great War" stated that one if not both Thalmor armies fielded were destoryed. This means that the humans have more veterans but also might mean they have more trained soldiers than the Thalmor currently do. I raise the issue of more troops because the Thalmor's goal in the war was to force the conditions of the ulimatium on the Empire and also to take Hammerfell. However they gave up on Hammerfell deciding that its dejection from the Empire was good enough. I understand the fighting there lasted another five years, so this decision seems like an admittance of failure. I think this failure occurred because the Thalmor ran out of men, running a police state (that may not be entirely secure at home) and an occupation is close to impossible without a large army to back it up. Also during their high water mark in the war the Thalmor tried to destory the Empire in its entirity. Why then didn't they send another army into Cyrodil to complete this goal? Or send one in to lift the seige the Empire's army put on the Imperial City? I know that the Thalmor did counter attack but that was from garrison forces, which were probably orginially apart of the invading army. What I'm getting at is why not send another one in from Thalmor territory proper. After all the Empire used reserves from Skyrim (critical in fact for the retake of the Imperial City) so why not the Thalmor?
If I understand correctly elves (this based on the Biography of Barenziah) have a much lower fertility rate than humans. This means that in twenty year span the human population could have replaced its losses even gained while the elves only just managed to replace. This begs the question, is a twenty year old elf as devopled as a twenty year old human? If not then that means even more time for the humans to build up even larger numbers while the Thalmor just have to be content with rebuilding their former numbers.
2) The Thalmor according to the dossiars, from the Thalmor Embassy Mission, are seeking to keep the humans divided but also not to allow either side to win. This because for the Empire it means more resources can be put to the Thalmor. Why care if the Stormcloaks win? I think it is because they know Ulfic enough to know that as soon as the situation allows he will attack them. I believe Hammerfell would gladly lend them a hand or at least allow the passage of armies. Going off of the idea that they lost at least one army, lacked the resources for a successful occupation of Hammerfell, and the mustering of reserve forces to save one of their deployed armies. I don't think the Thalmor are confident they could win that war, even if they did what remains of the Empire would've only been rebuilding while everyone else was busy killing each other (provided they remained netural, and weren't in Civil War).
3) The Thalmor also seem to be flaunting a lot of strength. Pointing to a victory over the Empire, which I believe was a result of war wariness. I acknowledge the large losses the Empire suffered but the fact remains that their army destoryed its only opposing force, while Hammerfell's armies were still more than a match for the Thalmor. I believe the Empire's army could have used Hammerfell's forces to compensate for their losses and force a status quo victory. I am of the opinion the Empire lost too many men to mount a successful invasion of Thalmor territory. I digress my point is that the Thalmor seem to be intimidating the Empire but also trying to convience themselves that they truly did win by their martial abilities.
Closing Remarks
My apologies if I rambled a little. Still I think the Thalmor are much weaker than what we are being led to believe. However I'm sure there are plenty of counter arguments and I maybe I don't have a critical piece of information that makes my argument pointless. Thank you for taking the time to read this post. I hope you take the time to comment. Regardless if you do or don't have a pleasant day.