Khajit are more adaptable as there species varies. The Orsimer are obviously the strongest and not as stupid as all other races make them appear, but there lack of proper civilization until recently sets them back. The elves all suffer from lack of conviction. The humans are more organized and easier to rally behind a single banner, although there short lives set them back. IMO the Argonians are the best suited. They're immune to almost all diseases, are superb in guerrilla, and are organized enough that when the oblivion gates opened in the Black Marsh, the Argonians actually pushed them back into Oblivion. They were so affective against the Daedra that the general in charge of the campaign in the Black Marsh actually had to close the gates there.