Telvanni might be very powerful, however they're very isolationist and tend to never look out of a window.
Not to mention unwilling to assist each other. The impression I got is that the Telvanni mage Lords are so busy hating on each other, possible spies and outsiders, that they don't really have the time to work together for any greater good. I think you'd probably end up with each of the Mage Lords' own households / towns fighting in isolation if it came to it. But then, the Argonians aren't supposed to have got that far north. Er. Right?