Of course the Argonians attacked the Dunmer out of revenge. Those nasty little Dark Elves deserved what they got for the slavery of the Argonians.
I will agree
some may have deserved it. But no matter the deed you cannot justify wholesale genocide of
innocent people.
Especially when A) Helseth had abolished Slavery years before the Red Year, and 2) it was in a fact, a Dunmer, http://www.uesp.net/wiki/Morrowind:Ilmeni_Dren who led the Twin Lamps. The organization in Morrowind that aided countless slaves in regaining their freedom.
Honestly, I think the Argonian's should allow the Dunmer to reclaim Morrowind as a gesture of goodwill and have the two people heal their wounds against each other. The son should not inherent the sins of the father, blood will not bring back the dead, what's done is done.