Imperials play puppet till they are fit to face the Thalmor. Ulfric fights for Ulfric. If he truly wanted to end the ban on Talos (which is pretty much the only thing he seems to use as a rally) he should've fought the Thalmor directly. But no, he had to place the blame on someone so he show 'weakness' of another power higher than him. I'm in agreement with Klawed Flaw. Thalmor are really the only ones who are the problem.
You seem to be neglecting the whole part about people being yanked out of their homes and marched off to be tortured and killed. And the part about how the Empire either can't or won't do anything about it. Which in the eyes of those whose families are being torn apart, that makes the Empire rather less than useless. Yeah you know, murdering peoples' families tends to get them pretty pissed off, dontcha think?.
Again, what are your thoughts about the Srebrenica Massacre? Real life example.