Board Thread:Lore Discussion/@comment-76.97.80.106-20130811163656/@comment-79.41.109.189-20140103013734

They simply couldn't win against the Dominion.

Quote from the ES Wiki: "Though many were angered against the Empire for signing the treaty, it can be argued that if the treaty wasn't signed and the war continued, the Aldmeri Dominion would have destroyed the Empire."

And that was the case when the Empire and the Stormcloaks didn't weaken themselves and the Empire had the full support of Hammerfell, what isn't the case now.