I've always had a problem with it since playing through WC3. The problem with them is that they would never go Horde, so the Alliance is their closest bet.
Though, I've always had a sort of alternate history theory around A Nelf uprising after WC3 that deposes Tyrande and Malfurion as failed fascists that could barely protect their sacred homelands despite 10,000 years of those two imbeciles saying there are only 2 kinds of 'good magic'. The newly formed free Night Elves create an Elven coalition between Nelves, Belves and Forsaken and essentially adding a third faction. (Nelves, Belves, Forsaken in the Elven Empire, Humans, Dwarves and Gnomes in the Alliance and Orcs, Tauren and Trolls in the Horde.) The reason the Forsaken fits in with the Elven Empire is mostly due to the huge population of High Elves turned in WC3 and Sylvanas, but that's more of a technicality of the time than a reality now.
A man can dream, though.