Rome was beaten, and seemed defeated and dead many times, from 700 BC to 1453 AD ( ending finally with the Ottoman conquest of Constantinople). But it always came back, and destroyed the enemy, or subjugated them culturally (making them Romans).
The Etruscans, the Samnites, the Gauls, Carthage, Parthia (several times) and the Huns. The Visigoths, Ostrogoths and Franks never really seemed like they could defeat Rome but did seem to be undefeatable by Rome. But eventually the Romans simply made them Romans. And they integrated into the Empire, as citizens.
The Vandals weren't really trying to defeat Rome, they wanted a homeland, after being chased out by the Huns, and (after sacking Rome) Rome gave them (the Vandals) a land in North Africa, west of Carthage, to call home. Diplomacy IS warfare! And Rome won. Again.
And the key here is that every time one of those cultures had the chance, it didn't wipe out Rome! It balked, and gave Rome a chance to re-group and re-oganize.
The Altmeri Dominion should have wiped out Cyrodil when it had the chance. The Dominion seems to be over-powering and arrogant (big mistake), and the clear winner. Cyrodil seems to be crying "please sir! don't kill me! I'll give you anything you want!" But like the Etruscans, Samnites, Gauls, Carthagenians, Parthians and Huns, the Dominion didn't execute the coup de gras. Cyrodil has the chance to regroup, and re-organize, the way Rome did many, many times. Allowing Cyrodil to sign the White Gold Concordat was a bad mistake.
Or, at least that's how I'd write it
Large parts of the concept of the Elder Scrolls are based in historical fact, why wouldn't this also be? 
Note that the Blades are already making a come-back.

