This is veering off track of the talk about the dissapearance of the Dwemer, but in order to understand the Elder Scrolls, you have to understand something of the TES universe.
The Universe exists within the imagination of a sleeping, scitzophrenic God (refered to as the Godhead). Within the nothingness of his dreams two primal entities formed, Padomay (Sometimes called Sithis) and Anu, representing Chaos/Change and Order/Stasis respectivly. From these two primal entities come the Et'ada, each aligned to a particular nature. The Daedra are Padomay aligned, and thus represent various aspects of change. The Aedra are Anu aligned, and thus represent various aspects of stability and order. Of course, the distinctions are not absolute, as there are individuals on both sides who lean more towards the opposing Primal, such as Lorkhan (An Aedra) being associated with change, and Peryte being strictly ordered. This just shows the interactions between Anu and Padomay, rather than having the two as completely independant forces.
Now, while Anu and Padomay represent the dual nature of the Godheads dream, the Scrolls are the record of the dream its self, from start to finish. Because they a representitive facet of the Godhead its self, this means they are above both the Daedra and the Aedra. That doesn't mean either can't interact with them, because Mortals surely can, but it means that they do not have absolute power over them.
Of course, using the Scrolls comes with risks. Because everything is in fact a dream, no one really exists. People who realise this experience something called Zero-Summing. Theres a journal in Oblivion writen by a Moth Priest whose in the process of Zero-Summing. Essentially, the rational mind destroys its self, because it can't comprehend the interaction of two points. Those pints being "I exist in the universe" (+1) and "The universe doesn't exist" (-1). The equation of course is (+1)+(-1)=0. In otherwords, its becomes "I exist in the universe, but the universe doesn't exist, thus i do not exist" which causes them to essentially poof out of existance.
The gods probably understand something of this dynamic, as people who study the Elder Scrolls simply poof away. This is probably why they make the Moth Priests blind over time, to prevent them from learning too much. How much the Gods themselves actually understand of the dynamic is open to interpretation, however, as one would assume they would be subject to the same rules. It could also be that the reading of the Scrolls causes you to go blind by its self, and the blindness is jsut attributed to the Gods by mortals.
On the same note, the Mortals could jsut ascribe the Scrolls to being Aedric creations because, acording to mortal mythic cycles, the Gods created the universe. They don't understand the real dynamic of the situation, and find a solution they can understand.
Pulling this back to the Dwemer, if the Scroll were responsible i would have imagined the Dwemer would have dissapeared during research, rather than in the middle of a battle. We do know they had a form of telepathic communication, so if one Dwemer realised they didn't really exist it would only be a matter of time before they all realised it and summarily Zero-summed. The fact that they dissapeared during a battle, not during scholarly exploits, is to me proof that the machine to read the Scroll wasn't as effective as it could have been. That doesn't mean, of course, that they didn't learn anything from it, it jsut wasn't the primary cause.