Oddly, I've ended up in two campaigns that have gone this route.
The first was a campaign in which we attempted to play the distant past of a fairly stock D&D world. We started with the Elven Kingdom (as such things tend to be called) intact, and were supposed to preside over the tragic fall of the Elves in genocidal war against the Goblins, were supposed to witness the grim decline of the Dwarves in their battles with the Orcs and Elves, and were supposed to witness the Rise of Humanity. (feel free to inject sarcasm to all capitalized terms).
Needless to say, things didn't go that way. Mostly because the players -- experienced all -- didn't have much vested interest in creating yet another stock D&D world.
So...we changed history a tad. We didn't war with the Dark Elves, we allied with them and used their brutality to gorgeous advantage. We didn't fight a losing war of attrition with the Goblin races, we eradicated them.
And humans...well, those humans that didn't directly serve the Elder Empire (yes, the name changed) were dominated, charmed, shapechanged, or...you get the point.
Now, I've made this all sound fairly Rambo-esque. It wasn't, it was more of a psychodrama. The idea was that when the existence of the Elven race is at stake, some sub-section of the society develops a psychological aberration: the willingness to risk life, limb, and sanity for the preservation of the whole, by any means necessary. Our characters were actually quarantined to preserve the Elven way of life even as we defended it.
At the end of the campaign, the black flag and silver stars of the Elder Hegemony (yes, the name changed again) flew over the entire continent.
Much, much fun.
On a related note, I played a Forgotten Realms character that was very much in the vein of the original poster, above. He was the fore-runner of The Return. Or had you thought that the Elder Races had left the continent forever? To an immortal, it had just been a weekend trip to the Island.
cheers,
Carpe