The more I read anything Atmora related, and I'm fascinated by it for some strange reason, I get the impression that there are some parallels to draw with the Earth region of Greenland. Historically, the Scandinavian vikings settled Greenland, and these settlements continued to be inhabited for several generations after the first settlers arrived. What ended up happening however, is that supposedly, the weather just got colder over time (not much green in Greenland anymore, I'm afraid), and as a result, the population started to starve. I'm not sure if the Scandinavians had necessarily gone extinct there (they could have married into local Inuit tribes), but after the 1400s or so, these communities went off of Europe's rader, so to speak. Much of what we know of this comes from Roman Catholic Church records, too.
Now, to draw my Nirn connection, after Ysgramor and his Companions left Atmora, they probably lost connection with it then and there, outside that one incident of sailors from Atmora begging to gain entry into one of Skyrim's ports (with most of the crew dead). This seems to be like the conditions that affected Greenland, don't you think? The people wanted to leave because the conditions got worse, and famine set in.
I would suggest that like Greenland however, a hardy few remained alive there in Atmora, and didn't die out entirely. They might have even adopted a more nomadic lifestyle, not unlike the Inuits (Eskimos) or Siberian natives. Now, this is speculation, so we don't have much to go on at this point.
I wouldnt mind DLC that takes us to Atmora... It would be kinda dead though. Unless there are still people up there, just not on the southern coast. I doubt it, but hey, Nords are resistant to cold. Maybe plants can be too.
I would love an Expansion pack to let us travel to Atmora, but why do you say not on the southern coast? I would assume that the southern coast is warmer than the northern.