What is going on?

Since the story is presented in a way that the horde betrayed the trust of night elves after relatively calm period, and the alliance is perceived by them as betraying them in the time of need, one could say that maybe the days and ideas of the Empire are not completely unreasonable.

After all there was a ptr-only line from Azshara that in the end, elves will serve again.

Azshara:
Thalyssra. So the Horde sends its sorceress to plunder the treasures of Zin-Azshari–and seize the Tidestone for your warchief, no doubt.
Would you entrust it to Tyrande? Perhaps she needs it to invoke yet another forbidden ritual.
It breaks a queen’s heart to watch her subjects squabble. Such a futile argument. In the end, you will all be mine again–one way or another.

Thalyssra:
Though our kingdoms stand divided, we share contempt for you, Azshara.

Azshara:
You see? We have found common ground already. Dear children, it is only a matter of time until you kneel before my throne.

It did not get out of ptr-stage, and maybe it’s a good thing, given that instead of killing we just let her walk away (I can imagine faces of Jaina & co. should they learn about it), but the idea was presented… in ok-ish manner.

It might be just a natural progression of the story, given that formerly exiled highborne are now a full-time part of the alliance.


gl hf