Think about it. Most of the buildings are already there. You just need to bush back the falmer enough to establish a settlement. There are resources down there and places to establish as a castle, temple, guard barracks, market, prison, and anything else you need for a town.
This DLC would give you the option to become a Jarl and rule your hold as you see fit. You would be able to tip the balance of power if you haven't played the Civil war quest yet. You could be a rouge state and give aid to criminal groups. You could order NPCs to be executed at random. Or you could take in refugees and orphans and give them a new place to call home.
The DLC would need to include new plants that can and do grow down there and can be used as a resource. The Khajiit merchants would probably like a place to set up a permanent shop. Vampires would probably like to live there. They could just be people. They might even chose to give up being evil. There could even be subterranean dragons who don't have wings. They would climb up the walls of Blackreach and drop down on their victims from above.
LET THE TROLLING BEGIN!!!!!!!!! *coughs* I mean... Thoughts?