User blog comment:Ulfric nord/the stormcloak rebilion/@comment-4113369-20130322143609/@comment-4113369-20130323180601

I don't know about you, but rejecting a peace proposal when you're on the brink of collapse sounds like quite a folly as well.

Bethesda admittedly made it somewhat ambiguous whether the Aldmeri Dominion really had the upper hand or not, but the fact remains that the Imperials thought they were losing. They made the right choice with what limited information they (apparently) had. Having the entire war be more or less pointless stings, but gambling with the Empire's continued existence (i.e. rejecting the proposal) does not sound like a reasonable alternative.