He had the option of fighting, but he went the path of the coward and gave up his people's freedom. The Thalmor wouldn't of even proposed the White Gold Concordant, unless they were severely weakened as well. Both the Empire and the Thalmor were in tatters at that point. Titus Mede should've made it a fight to the death, winner takes all. It would've been a gamble. The Empire could've won, or the Thalmor could've won. Better to die on your feet, than live on your knees.
Ah, yes, one of my favorite Che Guevara quotes. Yes, the Emperor did take the cowards way out, only to save his precious Imperial City. It's a shame too, because the White-Gold Concordat wasn't that different from the Ultimatum that Titus Mede II was given 5 years earlier, so essentially, all of the fighting was for nothing. After Red Ring, the Empire showed that sheer military tactics can defeat a stronger army, and I believe that the combined forces of Cyrodiil, Skyrim, Hammerfell, High-Rock, and maybe if the Empire were to strike a deal with Black Marsh, could fight back the Aldmeri Dominion. Also, the peace treaty will last as long as the Dominion wants it to, they will wipe out the empire eventually, but the war had exhausted both sides.