Your Empire is lost...
Your Emperor will soon be dead...
Your friends in Skyrim will not survive...
Your troops on our border have very few re-enforcements...
It is over. Behold the Thalmor, Behold the Future!!!
LONG LIVE THE ALDMERI DOMINION
The Empire didn't lose, both the Aldmeri Dominion and the Empire fought to a standstill. Though technically the only success the Dominion had was due to the fact the Legions were spread across four provinces and taken by surprise. When the Legions were able to counter-attack they won in every battle.
The death of Titus Mede II is fine, in fact it is a good thing. The Dark Brotherhood frame the Stormcloaks for majority of the quest line. A new Imperial force is already assembling in Cyrodiil to march into Skyrim when the Stormcloaks are winning the Civil War. The death of the Emperor by the hands of the Dark Brotherhood and the death of the Emperor's cousin which is framed on the Stormcloaks brings what Ulfric feared would happen.
"If royal blood was spilt, all of Cyrodiil would be up in arms. We can't afford an all out war with the Empire."
The Legions on the border have few reinforcements? Well nearly the entire Imperial army is on the Dominion's border. Twenty six years has passed so they may have from 10-18 Legions on the Dominion's doorstep. Few reinforcements isn't the word for it, since those on the border are reinforced by the legions that are with them. In fact they could be reinforced during the entire next outbreak of war since the Legions are close together and not spread across four provinces like the last war.
There isn't a need for reinforcements from other provinces, the entire army is already in Cyrodiil. The Auxiliary garrisons that are in the other provinces would trickle down, but their number doesn't matter too much.
So perhaps you should reevaluate your position
. Lore wise during the Great War anytime the Empire went on the offensive, they won, they owned the Aldmeri in every counter attack. It is over, for you though.
What you should worry about is more if Hammerfell sides with the Empire once more. They would probably demand some things like they did with Tiber Septim, probably get a third treaty written up.
The Legions can draw the Dominion's army into conflict and hold them there. The West Imperial Navy, could attack the ports on Valenwood and blockade Aldmeri from reinforcements or retreat.
The problem with the Thalmor is their arrogance. They would of won the Great War, had they stuck to the objectives they knew would work. Except they got greedy and decided to make a gamble to fight the entire Empire. When the second Great War sparks, all of Tamriel will be up in arms. While many provinces dislike the Empire, they hate the Thalmor more.
Edit: The greatest advantage the Empire has, is that the Psijic Order are also against the Thalmor. So you actually better hope Cyrodiil doesn't make allies of the Sea Elves, who do have a powerful navy. They were only beaten last time by the aid of the Psijic Order and Imperial Navy, but one of the good things about the Imperials of Cyrodiil. They make amazing diplomats, you could war with them for over an era and they would still be able to convince you to join their side.