Regarding the Aldmeri Dominion, Skyrim is probably screwed either way. But the Imperials are far better equipped to fend off the threat than Skyrim is on its own at this point, which is an unpleasant but practical reality.
Now, there are other factors to consider as well.
The way I see it, the evils stand thus: The Stormcloaks are racists. The Empire enforces a policy of religious oppression.
It was the specifics of the situation that made me decide the Stormcloak issue is the bigger problem.
There’s a point during Solitude quests where the queen asks you to take an item to a Talos shrine on behalf of the dead king. That moment made it evident to me that those involved with the Empire’s administration of Skyrim are not fond of the anti-Talos policy. Indeed, it seems clear to me that nobody was particularly keen on it—it was just the only option at the time to hold the Aldmeri Dominion at bay. As such, I would expect this to be a “lax” policy of oppression, enforced only at the minimum level to convince the Dominion it was being observed.
But the Stormcloaks’ racism? That’s coming from within, not being pushed on them from outside, and it seems to be embraced with enthusiasm, given the state of affairs in Windhelm.
The other trouble with the Stormcloaks for me concerns Ulfric’s actions in the Reach as described in “The Bear of Markarth.” That book makes it quite plain he was guilty of full-on war crimes against the populace. Even if I weren’t fond of the Forsworn, I would be troubled by that.
I tried to play neutral the first time, and was furious when Markarth got traded right into Ulfric’s hands during negotiations. As a result of all of the above, I end up playing Imperial now every time.
@Bravosi @LadyDay would love your thoughts.