You're presuming that because everything is the dream of the godhead, all individual actions and efforts are pointless. CHIM was never about the dissolution of individuality.
http://www.imperial-library.info/obscure_text/vehk_teaching.shtml
No, I realize that, Vivec still recoginises himself as an individual, I. If he didn't he would zero sum, not achieve CHIM. But my point is that once you achieve CHIM, you realize that, despite your individuality, and effectively limitless powers, there is little point in using them.
Thus Vivec could have used the powers of CHIM to obliterate the Empire, but did not, yet he still cared enough to negotiate a deal, why?
HOWEVER:
I'm probably wrong here, but I'm not sure he had realized CHIM; Vivec had achieved godhood through accessing the Heart of Lorkhan, but not by way of CHIM. Maybe the phrase "no one stands there yet" applies. It could be no one had achieved CHIM at the time Vivec wrote that; Vivec understood the nature of CHIM without necessarily being in the state of CHIM.
Its quite possible that your right, after writing that post, I thought that too, I think we need someone with a better knowlage of Lore history than me to say when exactly Vivec achieved CHIM...
EDIT:
the Godhead seem to exist solely for the sake of author tracts.
I would agree he is less of a God in the convenetional sense, but I wouldn't say he is just a narrative device. He is the reason why anything exists. For example, Anu and Padomay created existence, but who created Anu and Padomay? Answer is, the Godhead dreamed them.
Its like the old question, if God made the Universee, who made God? In this case its the Godhead.