And a poor noble is still powerful. That is because in feudal systems, the nobility serve as symbols of power. If you want an example of what happens when you take away the nobles' wealth, look what happened with the samurai in Japan. The didn't really lose power, and were almost more dangerous to the government than they were when they had land.
And on topic, Zurin would be mad when a weapon he basically created (made it functional at least) was not only used against a foreign enemy that has a different culture, but also against your own people. For example, Americans weren't exactly upset when the A-bombs went off in Japan, but think of how they would react if Truman had set one of in San Francisco because he thought there were to many Japanese people there without a strong enough allegiance to him.
Given that Tiber Septim had established an empire, the nobility had become less important. With the advent of professional armies, the samurai's western equivalent declined in use. Although the nobles' power would have only increased over the last few centuries, given that there was no unified government.
Also, he had just brought Tamriel out of a period of constant conflict; the dust was still settling, and this was the first time in centuries that other kingdoms were considered part of the Empire. It takes some getting used to on both parts.
But I'm sticking my neck here when I say that it is
possible that Tiber Septim's actions were to ensure that only those that could wear the Amulet of Kings (AKA his relatives) would remain on the Empire's throne, preventing certain doom
bliviongate: . Sure, Dagon hadn't invaded in the recent timespace, but he still may have been recuperating from the butt-kicking handed to him by Almalexia and Sotha Sil (yeah, I know it's a long time, but hey, what other explanation is there?).