Just a little a theory I came up with.

So what if the reason that the Shadowscales fell into such decline in the 4th Era, and what eventually lead to the organization being dissolved, is that the Serpent kept dominating the sky. This would block out the Shadow, which signals that clutches of new Saxhleel should be sent to the Shadowscales, and led to no new recruits. Not to mention the process for becoming a Shadowscale is insanely difficult.

There's also Umbriel to consider. Hordes of undead going through a province will kinda hurt the population.

And another small idea, the An-Xileel. What if they just didn't want the Shadowscales. They're, at least to me, obviously being lead by a "rogue Hist". Maybe the Hist wants to get rid of Sithis in Argonian society.

Also, what do you all think of "The King of Argonia". Personally I always thought that was B.S. The Argonians don't have a king. They might have a central leader that could unite all the tribes (their own little Horator), but something like a king? No... that just sounds dumb to me.