Im wondering why Ulfric didnt utilize them in the civil war. Despite being honest about it or not, if he promised to help them retake Morrowind after winning their own freedom against the empire then all their problems would be solved!
Ulfric and his "True Nords" dont like the dunmer. True. But here is how an alliance would play out.
1) Dunmer refugees join the fight against the imperials.
2) Ulfric wins Skyrim.
3) Ulfric and the dunmer take morrowind back.
4) Skyrim free of Dunmer inhabitants and refugees, AS WANTED. Dunmer get Morrowind back, AS WANTED. Ulfric gets Skyrim, AS WANTED.
5) Everyones happy!
Dont say racism is in the way. That simply isnt believable. Look at WW2, the Germans despite racial purity ideology allied themselves with the japanese and Italians.
Also, the Dunmer refugees shouldnt be underestimated. We are talking about a people that is used to harsh climate, that has a really strong endurance and all come from a country filled with everyday hardship and strife. Everything from strong redoran melee fighters to powerful Telvanni magi.