Several reasons, the prophecy at it's core didn't say the nerevarine would drive the empire out, if I remember correctly... it also says the nerevarine would be an outlander, a part of the prophecy said that the nerevarine would be "dragon born" as in, born from the empire, thus an outsider. The first part was added on while the latter was forgotten. The dunmer are/were traditionalists and xenophobic, and as it is the case with all faith and beliefs, it changed over time, they chose which parts they liked and forgot what they didn't. ~~~~~ And thus, in the end, the 'common' known by most, is that the nerevarine is an ashlander that would drive out the empire from morrowind and restore the 'old ways'. While the original, is about an outlander that will cast down the false gods, destroy and/or redeem house dagoth, and the finally restore morrowind to it's former glory. ~~~~~ The other main reason the emperor supported the nerevarine, is that the threat of dagoth was greater than most thought it was. If Ur succeeded, he would not only transform morrowind in a bunch of hive-mind ash-zombies, but with his 2nd Numidium, powered by you-know-who's heart, would have conquered all of tamriel and basically unmake everyone, cutting their individuality, and joining them all into his hive-mind (an outcome somewhere between what the dwemer did and what the thalmor are planing to do, if you believe the popular theory about them that is.) ~~~~~ My theory is that the Nerevarine actually did fulfill the last part of the prophecy (restoring the 'old ways') and drive the empire out at the same time, although indirectly... By casting down the tribunal, Baar Dau, the moon above vivec-city crashed and caused the eruption of red mountain, effectively destroying the decadent dunmer civilization, and it's symbols (Vivec's city, Ald-ruhn, the tribunal faith, etc.) and restoring the ways of Veloth, couple that with the recalling of legion forces during the oblivion crisis, most of the empire left morrowind. ~~~~~ So finally the slate was cleared for morrowind, and the nerevarine fulfilled his/her prophecy.