I certainly do believe that there are other Septim heirs out there, and it is quite far-fetched to believe that Martin is the last Septim. What disturbs me most is how Uriel VII's three legitimate sons all had yet to sire any children, when certainly if they took after their father (or any of their grandfathers, really) they would've been having love affairs left and right. Certainly, I figure the reinforcement of patrilineal descent may be part of it, but in the end, I figure Bethesda just wanted to pull a dramatic end to the Septim line and emphasize the need to end this Tamrielic era, time to move on to things anew. And you know, seeing how they could lore-BS the terraforming of Cyrodiil into a forest, this isn't much different.
On the topic of possible descendants - the only one I will make mention of here, as I have for about four threads now, is a possible connection between the Septims and Daggerfall's royal family. In Daggerfall, an agent of the Underking will tell you (I believe as part of the reward dialog for the Castle Llugwych question) that
"not even death can hide a true descendant of Tiber Septim from the Underking." For those who do not know, this is referencing King Lysandus - whose blood continues through his son Gothryd, who is still regent of that kingdom at the time of the 3rd Edition PGE. Of course, this entire bit of dialog may be merely metaphorical, though as the Underking's corporeal manifestation and mind seems to be that of Zurin Arctus, it may be literal.