That would make sense if you could switch allegiances in the game. But given everything that's known, all Khajiit players will be forced into the Dominion, and all Dunmer will be forced to work with Argonians and Nords. Are there none that defect? Are there none that break from all alliances and just go adventuring on their own? None that even live in other provinces (aside from the token I'm-rebelling-against-my-masters NPC)?
Yeah thats not something to be happy about, I agree.
I can accept it as a limitation of the MMO genre, but I would rather have seen that any player race could be in any alliance.