Skyrim V: Skyrim

[Calemyr]

But the Bretons are a race of half-elves with magical abilities on par with the Altmer. Considering the Thalmor's Nazis-like focus on racial purity and superiority, the very existence of the Bretons should be an affront to them.

Absolutely, if their racial agenda were their primary one. As long as the Bretons aren't advancing Talos, or finding a way to restore Lorkhan or reinvigorate the other Divines, the Thalmor have no problem with them. Oh, they'll spit and decry them, they'll posture and paint the Bretons as petty copies of their glory, but it's all a show, a shell game to keep the world from watching as the other hand undoes the laces holding the world together.

And again, there's no point to making enemies of culture that don't pose a threat to their religious agenda. If Hammerfell or Highrock or Blackmarsh were driven to the point of war, it could hinder their plans. But if their plans succeed, every non-elf everywhere will be blown to Oblivion. So they'll antagonize them, keep everything and everyone uneasy and on edge, but never push them too far. Only Cyrodil and Skyrim need be destroyed, and if they destroy each other all the better.