User blog comment:Longdead97/Ulfric's war effort & gaining support. Smart move or no?/@comment-80.216.216.52-20130328091203/@comment-24.251.207.177-20130331203126

That's actually not entirely true, take Breton's for example and the lore behind their existence:

http://elderscrolls.wikia.com/wiki/Breton_%28Oblivion%29

On the Night of the Tears, the snow elves which previously had an alliance with the new Nords/Humans sacked and burned the great city. It is rumored that the Snow Elves attacked the city because of the Eye of Magnus, which can be found in TES Skyrim. When the Elves attacked, they took many slaves; some took them west to High Rock and others took them south. As the years went by the Humans bred with Elves. Thus this what created the race of Bretons who can use Magic and are good at fighting.

- Vladimir TES Historian

Ancestry
Bretons are the elven hybrids of Nedic and Aldmeri ancestry. Because of this, Bretons physiologically appear similar to Men races. Their magical talents find explanation in their mer blood.

I think this illustrates fairly well that they are indeed races and that new races can emerge from continued breeding between them. In this case their physical appearance maintained the physiological appearance of the mother but parts of the Elven fathers did impact the resulting offspring. And considering that Breton's do indeed continue to have children they are obviously fertile.

The mothers traits are indeed dominant in such a pairing to be sure, but to say nothing of the father is inherited is simply not true or Breton's could never have come into existence as an accepted separate race from nords.