Who said the Argonians have much choice? Maybe the Hist recognize the threat of Molag Bal and their own inability to do anything to stop them. However they know of some rather powerful gods of their hated neighbors next door who have stopped Daedra Lords many times. The Hist could easily force the Argonians into allying with the Dunmer. The Dunmer could even force the Argonians into Slave armies. My question is why the hell would the Dunmer ally with the Argonians? What do the Argos have to offer the Dunmer that they would want or cannot take for themselves at this point? The 2nd Era Dunmer were very strong at this time and also had 3 fully functioning, and at the height of their power, heretic godkings. It will be interesting to explore this, hopefully.
We have to see Morrowind in terms of its political factions here and I think motivations can be gleamed from their personalities.
-Dres and Hlaalu would welcome easy access to cheap wealth that Argonia can provide in terms of resources and slave labour.
-Indoril and the Temple would follow the Triune.
-Redoran would be insular. It would ignore the situation as best it could and go on with business as usual.
-Telvanni would be fragmented. No matter what official stance Telvannis takes, individual mage-lords follow their own agenda.
It all boils down to the Triune.
If they give their blessing to this alliance, and I believe that Vivec and Almalexia would be open to it, then it would go ahead.
Vivec is a diplomat and an empath. He would not refuse his brothers, who are him, in their time of need even though the evils that the alliance begets would pain him.
Almalexia would be a mother unto her people and guide them towards a diplomatic solution. She is an accomplished stateswoman and would look towards the bigger picture.