Believe it or not, Altmer and Bosmer aren't the only races allowed in Alinor. An http://www.uesp.net/wiki/Skyrim:Venarus_Vulpin lived there before some trouble with a local inquisitor (which for all the Thalmor's ills seems pretty justified in this case). Added to this that I've never seen anything suggesting mannish and beast races aren't allowed in Dominion lands, I say it's more than feasible to have men and beastmen there.
I disagree, I don't want to end up having to thwart the villain repeatedly without making any progress against them like it was a Saturday morning cartoon. I don't want to have to suffer through several Darker and Edgier games where Nazi-esque elves rule over everyone, where half the time we'll probably end up as their unwitting pawns, and end up waiting 15-20 years before we get to strike a meaningful blow against them. Especially if the games end up involving unforeseen threats that were never alluded to before. If I wanted that, I'd go play a Warhammer 40k game.
The Thalmor were the most foreshadowed threat in TES V. To pass them up in favor of some previously unforeseeable threat out of nowhere or making them into a recurring villain you thwart over and over again seems like far worse a move than their threat being largely over by the start of TES VII. I don't want an offscreen moment of awesome of the Dominion getting destroyed, at least not before the player gets to put it in motion. I don't even think that stopping the Thalmor will necessarily spell doom for the Aldmeri Dominion, and it certainly won't end threats to Tamriel. But I want to be able to combat the threat that Bethesda did so well at making us hate, and foreshadowed so well, without having to wait decades for it.