The Dynasty specialized themselves socially with military units, formalized Charms, and established institutions, while the Lunars rebuilt their Exaltation around this conflict. This is not a battle royale fistfight between all DBs and all Lunars on a featureless plain, its saying that all the advantages in all the areas of expertise Lunars have held even after aggressively optimizing themselves in a nonsensical plot way still only amount to "chipping away" at the conflict with no end in sight before the Empress' disappearance. That's patently absurd on its face, and if even after all that the Lunars have Not equalized the playing field at all, then how in god's name are they presented as some sort of narrative foil? They are losing this fight for the same reason the Caul looks like a losing fight, because Little Gain is effectively No Gain when you're trying to establish the stakes of a story. It gives lie that the Lunars could have made any sizable progress whatsoever, making the whole "you can make Big Changes" party-line of Exalted into a sham.I see no problem with four hundred disorganized Exalts losing members and experience while being huntred across millenia losing to an empire led by ten thousand Exalts who also have specialized themselves in the systematic extermination of Lunars.
People do not Want to play "the guy who will get things done Eventually, unless sudden unexpected and uncontrollable circumstances permit." So making the entire history of the Lunars be the tortoise to the Realm's hare strikes a dull note with me.
And that's without getting into how long these time-frames Actually are. If each one of say, 200 loyalist Lunars kills just one DB an average of every two years across all the varied battles that have gone on during the 700ish reign of the Scarlet Empire, that's still a casualty rate of 70,000 Exalts, and somehow they are not improving things more than incrementally. That's even assuming every one of those Lunars totally dies in the attempt, because DBs have a much longer lead-time to bring new fighters to the front lines. Projecting this "stalemate" across absurdly long periods of time only serves to make it more ridiculous and narratively untenable when you hammer out details like this, that even killing one of the enemy on a semi-regular basis introduces an Outlandishly incongruent element to the entire affair. It makes you ask what the hell the Lunars are doing if killing a bare-minimum of DBs hasn't been working in their favor, why this is all going so poorly for them, and how have they not got their shit together somehow in light of all this to make this conflict feel like more of a conflict and not just tripping over themselves in an attempt to stay relevant.
If the Realm had been having more trouble controlling the coastal satrapies, I could see it. If the Legions were making costly pushes regularly into the Threshold and coming back with bloodied noses I could see it. If the Lunars were presented as a legitimate Obstacle to the Realm in any way rather than just an annoyance with ambitious hopes, I could see it, and it would justify thinking that all those centuries of prep time spent was possibly leading up into something more, and not just a steadfast refusal of the writers to characterize the Lunars as being unable to do Anything meaningful in the setting yet again.
Lunars always lose.