The Empire reaching a compromise to the Thalmor is nothing new. When the Empire invaded Valenwood, they decided it would cost too many men to fully take over, so they let the Bosmer keep a lot of their leadership. This is just the same, agree with the Thalmor on something, however stupid, save lives and resources to defend the nations under the Emperor.
The Stormcloaks, unlike the Empire seem only capable of seeing one step ahead at a time. They firmly believe that if they defeat the Empire, then that will be the last of their troubles. They do not consider the position they then put other nations in. Valenwood, the Bosmer are already forced under the control of the Aldmeri, most Bosmer would prefer full Empire rule if we listen to the Blades in Skyrim. As much as this is not clear as its only one perspective. The nords pulling away from the Empire not only weakens the whole of Tamriel toward Aldmeri domination, but also may end up in one of two situations. The first most likely, Thalmor conquer Skyrim and the nords end up back where they were. The second, the Thalmor convince Skyrim to help destroy the Empire, then most likely revert back to the previous. It would not be hard for the Smart Altmer to convince someone as short sighted and egotistical as ulfric.
And that brings be directly to Ulfric. To have someone as him lead Skyrim would be a disaster. He is a war artist. From the start of the game, to the end of the campaign, he speaks rarely of compromise. Just listen to his speach on how the leader of Whiterun is a true Nord. Where the Empire see the future of Tamriel, Ulfric seems incapable of seeing even te short term future of Skyrim. He is partially painted by the sentimental nords at the start as a freedom fighter. A mistake I believe on Beths part. As with little further investigation, we see the inherent racism surrounding Ulfric. Lets think in real terms of leaders, with racist undertones, that convince a whole nation to stand up and fight for what they think is freedom. So the nords gain Talos worship back and arent front line for the Empire, at what cost?
Racial segregation and tensions with other races? Like I earlier said, the Thalmor are biding their time, waiting for the outcome. If it be the nords, they will see that as a red flag to move any future attack on the empire forward, meaning for Skyrim they are just another obsticle, unlike if they stick with the empire and likely thwart off another attack, or put the Thalmor off attacking all together. Look at Windhelm, how the Dunmer are treated, imagine that large scale. This would result in the possibility of most foreign races leaving Skyrim, which I dare say would mean economic disaster for Skyrim.
Strict laws and punishment? Yes the empire are little forgiving of criminals, look at how the game starts, but I would see Ulfric who already has illusions of granduer, becoming far more and more of a Tyrant. Would this push more people toward groups like the Forsworn? Would the Forsworn later join another group? Maybe in and attack the Thalmor could recruit them against Markarth.
Another thing to consider, will Ulfrics treatment of other races anger another nation? The Orcs keep a seperate appearence in Skyrim, the Redguards are barely allowed into major cities, would these two old adverseries see a facist regime as a weakness? Would Ulfric go as far to clear out Orcs from Skyrim? I think its likely, he is a warmonger, and once the Empire is out of the way, he would look for the next battle.
You haven't played the Stormcloak questline. Ulfric Stormcloak very well knows the threat of the elves.
How are the Thalmor convincing Skyrim to destroy the Empire? The Stormcloaks aren't waging an invasion war against Cyrodiil, they're fighting the Empire's presence in Skyrim. It would be very hard for an Altmer to convince Ulfric anything.
Neither the Stormcloaks or Ulfric are racist. The Dunmer in Windhelm live in the 'poor district' of Windhelm. They do not have to pay for housing or taxes, they are there for free. The Nords that used to live in the Snow Quarter were most likely evicted. Jarl Ulfric doesn't help the Dunmer because:
1. He is planning a war. Throughout history, wars have averted the focus on reform (see the Progressive Era of America).
2. The Dunmer do not do anything to help in the war effort.
In addition, most of the Elves in Windhelm are successful - Revyn Saadri, Ulundil, Niranye, Belyn Hlaalu, Suvaris Atheron and a few more. There's only about two that actually complain - Malthyr and Ambarys (I think), and they spend all day skulking around the New Gnisis Cornerclub. Most people are sick of them, that includes the other Mer in the city.
Ulfric is a Nord Nationalist, not a genocidal tyrant.