The Axis were human and the committed genocide during World War 2. The Rwandans were human and yet they killed their fellow countrymen. What is to say that Wizards are any different?

They aren't that many house elves. And house elves are restricted, ie they are bound to one master, while Muggles could be used for large scale slavery.

However, I've given up thinking that Muggles stand a chance, simply because Magic is only limited by creativity and imagination, while Muggles are heavily limited by the technology they have.

The only advantage Muggles have is numbers. If, say, 5 Wizards dueled 5 Muggles, it is almost certain that the Wizards would win.