They have a good cause; but their rebellion is foolish, they take it too far and many of the recruits and high ranking officials, including Ulfric, are xenophobes.
Their cause is just, in that no one who has faith in the Divines should be bending a knee to the Thalmor and their damnned Condordant. However, killing their own High King over it? Using dishonorable tactics at that? Ulfric is no true Nord. He is barely competent as a general, and got to his position through trickery and backbiting. I hold no love of the Empire under Aldmeri rule, but all Ulfric Stormcloak's rebellion is doing is making the situation much, much worse. If I actually lived in Tamriel in this time period, there is no way in Oblivion I would follow that man. I might not join the Legion, either, but I would have a much better chance of sticking it to the real threat of Tamriel, the Thalmor, by being within their ranks.
The Empire only signed that treaty to end the Great War and save lives. They even turned a blind eye to Talos worship, which was made illegal in the treatise, but I suppose that wasn't good enough for Ulfric. His hot headed ways got the better of him, and it is only because of his rebellion that the Thalmor's Justicars were sent into Skyrim along with the Imperial Legion to settle things down. Now, because of the Stormcloaks, innocent people are being taken captive, or executed simply for worshiping their patron deity, in addition to weakening Skyrim, and the Empire, as a whole as they continue this pointless civil war.
And because of all this extremely well put together political issue, where we all can debate fiercely over who is good and who is bad without anyone being truly right or wrong is one of the many, many reasons I am loving this game. There was nothing in the story of Oblivion that could spark this much debate except for maybe arguments over how terrible it was