I don't really consider myself much of a Star Wars lore buff, but from what I can tell Bioware's got at least 600 years of blank timeline to work with if they want to. And considering that the Empire prepared itself for over a millennium, I somehow doubt that it'd all be completely undone within the course of a few measly decades. After all, the New Sith Wars went on for a 1,000 years, so what's to say this conflict couldn't go on for a few centuries?
If I were to guess how things turn out, it'd be something like this: The war goes on for X amount of time, eventually the infighting within the Sith Order causes it to dissolve into smaller, obscure tribes or cults. This could in turn cause the Empire itself to fracture and split into several different factions (Sort of like the Galactic Empire did after Sidious and Vader were killed). These Imperial remnants could then, over the course of time, eventually either be taken down or surrender and be integrated/assimilated into the Republic some time before 2,000 BBY. I'll probably be corrected on this theory, which isn't very lengthy to begin with, but this is simply my speculations. I dunno, it just doesn't seem plausible to me that the Republic manages to wipe out what is essentially an entire civilization (Which they do, considering there's almost no trace of it - besides the ruins on Dromund Kaas, which is an obscure, nearly forgotten planet itself - around the time of the movies) in the course of a couple of years.
As for the current in-game conflict? I can see what people mean when they say it's very one-sided. Putting the Great Galactic War (i.e. backstory) aside for a second, Empire players haven't gotten to experience any groundbreaking victories against the Republic, like the Battle for Corellia or Liberation of Balmorra, their experience mostly focusing on infighting and smaller campaigns. I think it'd be great if Bioware threw the Empire a few victories in the future, if only to make the conflict seem a bit more genuine and dramatic, rather than having the Republic just riding a wave of victories all the way to Dromund Kaas. Granted, I haven't played a whole lot on the Republic side (most of my characters being Imps), so what do I know?