It's easier to make that kind of decision in real life. If you're from America, you probably don't like the Taliban or Al Qaeda, or who ever America is currently fighting. Giving us 2 shades of gray isnt really realistic. Its about where you were born, who you were born to, who you were raised by, and the people currently around you (and the "media" or other anything else that craps propaganda). If you're a Nord born and raised in Skyrim, you would probably never think to join the Thalmor or any other sworn enemy. There are some exceptions, aka traitors, but usually in real life you just see good guys (us) vs bad guys (them). Even in modern times with all the communications we have no. Being outside looking in is a different story.

What would that be anyway? Some sort of materialistic, inclusive society comfortable with the world becoming increasingly profane with each kalpa?

A totally accepting, unbiased, and completely not racist cosmopolitan society, who likes the Kalpa the way it is and doesn't want the world destroyed.

So they'd be a little better than they already are.

The thalmor think of Mer as the best most perfect race who are better than men in every way, i think it would be interesting if it was less the tamrielic empire and more the empire of man who hate mer, therefor we would have two morally grey sides (good vs bad is boring) and it would depend more on your characters backstory.

What the Empire really needs is more weird Cyrod.

YES.

Or better yet, make a third faction attacking Tamriel during this time of weakness. And I don't mean dragons, I mean armies of mortals. Cohesive, with good logistics and a single purpose. Not overwhelmingly powerful. Just needs to muddy things up. Kinda like when you see 2 guys fighting, you kinda wanna join in and brawl.

Gah. Last thing I really want is the Sloads to come in and everyone go "WE MUST UNITE." I'd much rather see the Maromer come back to assail Summerset again. I'd really like to see this immortal wizard of theirs...

No. No unification. Unification svcks. Sload svck. Maormer are cool, but not in that circumstance (I want them to eventually become playable).

So true, Elder Scrolls needs a new race and the Empire is a stale stepping off point.