True, but if you want to look at it that way you'd assume considering himself an elf would lead to elven independence, and while that's nice in theory, it wouldn't work. At all. They'd all be killed. There are too few of them and they're too weak at the moment. So really the "elf route" and the "equality route" are basically the same thing, except with the "elf route" he could go out of his way to appoint some high ranking elves to positions of power within the empire, council members, etc.
Fantasy DEI, if you will.