The strength of the Dunmer pales in comparison to their horrible attitudes, and is the true driving force behind their penchant for enslavement. Superman could destroy the Earth, but would he ever do it on purpose?
So much for loyalty or compassion I'd say.
I think one chalk that up to millenia of psychological abuse.
Hey now, not all Dunmer are mean, the ones in Oblivion (aside from Valen Dreth) were actually very friendly. There were plenty of friendly Dunmer in Morrowind as well.
Loyalty and compassion aren't relevant to the residents of Black Marsh, they are a system of warring clans, loyal to their fellow clans men and not their race as a whole. The only universal loyalty and compassion that the Argonians have is that they show to the Hist.
Also, the damage has been done to the Khajiit.....why not use them for what they are good for and what they enjoy?