I am actually a little unclear what the precise ethical stance elves and dwarves are taking with each other.
We talk about grudges, but the dwarves aren't in an active state of war against the elves. They had that war, declared victory, and went home. They aren't sending Slayers out to kill as many elves as possible. They don't have a specific amount of harm they need to cause elves to end the grudge as far as I am aware.
Which isn't how other grudges see to work, is it?
It's more like... dwarves have decided that elves are inherently untrustworthy, that the alliance was a mistake, and that if they see an elf dying by the side of the road they absolutely shouldn't do anything about it. On the other hand, I don't think they would go to the side of the road to make sure they died either?
But if you actually challenged a dwarf on it and said, "Look, obviously the elven leaders did something really shitty and a lot of elves supported them and they were totally in the wrong, but individual elves are individuals. How can you say that they're all bad when we've seen individuals do good things and be good people on a one-on-one level?" what's the response? Assume for a moment that the dwarf was a deep thinker who actually felt obliged to justify themselves. What would they say?