Also I seem to remember reading that Kagrenac kept his activities secret from his fellow Dwemer and that the Tribunal (as they came to be known) and Nerevar do not clearly explain how they learned about Kagrenac's doings.
This.
Consider the version of the disappearence of the Dwemer as laid out in http://www.imperial-library.info/mwbooks/nerevar_redmountain.shtml. According to this, the Dwemer worshipped "a profane and secret power", which could be the Heart of Lorkhan. However, they were not terribly interested in doing anything with it. Dumac was unaware of Kagrenac's plan to make a "New God", and he went to war with Nerevar over a perceived threat to Dwemer culture.
Also, according to Nerevar at Red Mountain, the Dwemer disappeared only after Dagoth Ur, under orders from Azura, "separate[d] the power of the Heart from the Dwemer people."
Of course, Nerevar at Red Mountain comes from an eyewitness account that was passed through several generations of Ashlander verbal tradition before getting written down by the Dissident Priests (or whomever) and becoming part of the Apographa. As a few people have said, it is likely that Kagrenac was not literally a "high priest" but a head scientist/engineer. (Kagrenac has been called a"tonal architect" elsewhere, which seems to refer to Kagrenac's mastery of some kind of divine magic based on vibrations.) Likewise, the "profane and secret power" that the Dwemer supposedly worshipped may not have been the Heart of Lorkhan, per se, but rather an empirical tradition as opposed to Chimer Daedra worship.
Even making allowances for slight distortions of the story due to the Ashlander's own unique cultural perspective, this story suggests a few interesting facts...
First, Dumac was not aware of Kagrenac's plans to tamper with the Heart of Lorkhan (whatever Kagrenac's goals may have been). If Dumac, the King, didn't know about this, then it is unlikely that Kagrenac had a significant following. I see Kagrenac as more of a "mad scientist" figure. (Not to imply that he was insane, but rather foolish for messing with magic that was way over his head.)
Second, Kagrenac bound the souls of his people to the Heart of Lorkhan. Azura told Nerevar how to disrupt this process, and he told Dagoth Ur. After Dagoth undid Kagrenac's binding, the Dwemer disappeared. Thus, the Dwemer cannot be thought to have succeeded. After all, Azura would not have told Nerevar how to
finish what Kagrenac started, but rather, how to undo it.