Actually i see it being more along the lines of the Dunmer were offered homes in Skyrim under last king with them not having to have to pay taxes and having thier own laws and such but being the type of peopel they are got offened that the locals didnt respect thier ways from morrowind and got offened that the locals expected them to at least respect the ways things were done in Skyrim. Obvious the Dunmer never heard the saying "when in Rome, do as te romans do" AND with the dunmer offered that after morrowind kinda vanished under lava, the Argonians pretty much got ordered and brainwashed by the hist to kill every dunmer on site.
So i see it as them being seperated to avoid conflict.
actually it was the thalmor (According to a book by an altmer refugee, although he might've just been paranoid about the thalmor, so this may or may not be true) that goaded the argonians into attacking
Yes, but why not the other way around? The Argoinans are more deserving of the city. Also, the Hist didn't need to brainwash anyone. The Argonians hate Dunmer, and with good reason.
argonians are docile, if you have not noticed, so they would not normaly just start a war that was not needed to survive. the hist did not even call them back to get revenge on the dunmer, they did it so the argonians could evolve for the oblivion crisis