Board Thread:Lore Discussion/@comment-71.227.163.226-20150118222745/@comment-86.130.80.150-20150127125949

Short version... the Tribunal (Vivec Almalexia and Sotha Sil) defide Azura and she cursed ALL Chimer to become Dunmer becuse of the power the Tribunal had taken they managed to stay looking like Chimer (or cast an ilusion to make it look like they did maybe they were even more Daedra like than Mer now anyway). After the events of Morrowind only Vivec (with reduced power) remained and he then disappeared.

My guess would be even if they were capable of having normal offspring Almalexia was too busy being a vengeful god Sotha Sil was too busy going a bit mad and Vivec was too regretful about what they'd all done to even think about it.