If the Dominion's entire military was destroyed and the Empire had a somewhat of a standing army as some of you say then why the hell would the empire agree to a treaty on the Dominions terms? Thats like Alexander letting the Persians dictate the terms of the teaty after he crushed them after Gaugamela and the battle of the Persian Gate.... obviously the Dominion had a strong, large reserve, enough to pose a threat to the empire if it was able to demand lands in hammerfall and impose heavy handed terms against the empire. if not the Empire could have at least replenished the numbers of some legions over the next few years and crushed the Dominion. As an Empire supporter myself i just have to say to the others face it, the empire isnt the same empire as ES1-4, its very similar to Rome in its last hundred years or so, bethesda is making it obvious that its about to collapse, and just like Rome too (which its based off of) due to internal strife, corruption, a weakened army that is no longer the strongest in the land, lack of strong leadership, etc. You can even hear it in Tullius' voice compared to Ulfrics he has this "another day another dollar" tone saying things like "you damn nords and your honor/customs" christ his lieutenant seems more enthusiastic then he does.