High King Torygg ruled Skyrim. It was part of the Empire, but it was under his rule. He accepted the duel with Ulfric, and thereby negated any law regarding the murder of either combatant.

Sure, it was an ancient custom, but the ruling party not only acknowledged it, but accepted it as well. That makes it law. Roggvir should not have been executed as he was not guilty of any crime. His execution was simply a way for the Empire to exert dominance over Skyrim (with help from the Jarl of Solitude) and "restore order".

QFT.

Um. Must be the first time I've ever agreed with you on something, ain't?

Yes, and this is the first time you've been right.