In my head canon the Nerevarine always had to be a Dunmer. Similar to how the Dragonborn is and always will be Nord to me. (Yes, I thought about Argonians but it just makes a lot more sense to be a Nord combatting Tsun to enter Sovngarde). My hero of Kvatch usually is not Imperial but I feel this is the canon choice here. Though Oblivion is far more liberal in that regard.

With this notion it's preposterous Caius is the Nerevar. The Dunmer are rather xenophobic, and considering you start of with better disposition as a Dunmer with most Dunmer (even in the engine) I feel a Dunmer Nerevar is far better to unite the houses.