Please bear in mind, I haven't played the beta, but have read about the Sha and Y'Shaarj.
Do the Klaxxi/Mantid know that the Sha are likely the creations of their ex-God and master? Surely they should know. I just don't get why they'd still choose to side with something when its own breath can cause the most important structures in Mantid society to crumble (the Amber Trees, Mantid use Amber in eveything they do, so naturally these trees are sacred).
Yes, the Empress is possessed, but why would the clear minded Klaxxi freely chose to align with something like Y'Shaarj?