I think what you say is true, Rothe, and it is unfortunate.
People should not knock D&D because it caters to dark fantasy (or any sort of fantasy.)
Yet people - including Gamers I have known - do just that, and knock our game, and knock our roleplaying, especially if it involves evil characters. They even knock their fellow Gamers, and ruin the game ...
Anyways ...
TSR decided that Medegia had no allies, no help, no recourse, and no way for her people to escape. TSR decreed massacre for Medegia, an end to that realm and all her works. And if TSR decreed that, Medegia was sorta doomed.
All that's a given.
(sighs)
I honestly think that Medegia's answer - had TSR theoretically allowed it to have an answer - would have been somewhere in the rules themselves, and creative application of the rules. Or, since the NPCs of Medegia know nothing of the rules, creative NPC roleplaying and invention and achievement.
Somewhere in the rules and creative minds of those NPCs, like the answer to a puzzle, lies the Medegian key to victory.
Yes, they can gain through allies, alliances, artifacts and relics, assassinating Ivid, building and training their own forces, fortifying their nation for war, and a host of other measures.
But something else is needed. Something obscure, something beyond the pale. It's a puzzle, and the answer is not something I've figured out, but the Medegians need that answer.
That something special is needed because Medegia ultimately cannot win against Aerdi using conventional means. Aerdi is simply too powerful for Medegia to win a protracted war against it using conventional means.
Aerdi has it's own artifacts and relics. Aerdi has hordes of powerful monsters. Aerdi has vast armies of humans and humanoids. Aerdi has an enormous war machine and supply systems set up to support it. And the ruler of Aerdi - Ivid - falls, another takes his place. (Yes, if Aerdi disintegrates, as it did in the Canon, then Medegia wins. Just assume Aerdi stays in one piece for this discussion.)
For lack of better terminology, Medegia needs something Magical in order to protect herself.
It could be a roleplaying concept, a rules concept, a creative concept, or all of the above, but something new and different is needed.
What could that be?
Forget the idea of the Medegians turning to evil, or killing to gain experience, or whatever.
Medegia's answer needs to be something, but those things aren't what is needed.