I have a v16 khajiit stam nightblade. Trust me, we can deal dps. As with all classes, you have to think about your build to maximize what you want. My tips:

1. Stam NB can have stamina resource issues. You burn it sneaking, so you have less when a fight breaks out. Invest in all the sneak cost reduction passives, it helps.

2. Nightblades tend to have faster abilities over more powerful. My dual wield passive hidden blade does like 8500 physical damage, compared to like 12,000 for 2h ability wrecking blow. But I can hit with four blades from range in like two seconds.

3. Many class abilities give you a stam morph and a magic morph. People don't seem to understand that regardless the morph perks, you generally need the one that matches your build. As an example, I like concealed weapons speed boost. But it's a magic ability, so I deal like 2500 damage with it. Surprise attack is stamina, so that morph gives me 6,000 damage.

4. A nice thing about NBs is the ability to choose magic based retreat skills (dark cloak). It's easier to bug out of a fight.

5. Don't hesitate to play a NB. When you get to vet and start opening champion points, there are a ton of options that will amp your damage. After a couple months playing my vet character, my phys damage is +20%, crit rating +15% and crit damage +15% (or something like that) via champion points. Champion points allow you to hone your character and adjust for most deficits.

6. Likewise, gear enchants help cover deficits. You don't need to worry too much about this until,you reach vet levels, but my V16 has 3400 weapon damage - 600 of this is from three weapon damage enchants on my accessories. I enchant my weapons with "irresistible damage," which, as implied, can't be stopped by buffs.

7. Speaking of weapons, learn "threading." This is a great play style for NBs. It means putting a light attack between most any ability you proc. Sap essence...light...surprise attack...light...ambush...light...etc. It's a little tough to get used to, but good threaders (I am not) can get off just as many abilities with a "free" 400+ damage hit between every one.

8. Nightblades are designed to be crit strike dealers. Good News...pve doesn't really defend against Crits. Invest in passives and armor (night mother, hunding) that increase your crit rating. When you get Crits up to 65%+, you'll be dealing 50% more damage on over half your hits. Nightblades need a decent crit rating...don't ignore this.

9. Bows will be rough on dps until it's leveled. Get a training bow and increase faster. The bow is never going to be as strong as other options, but focused aim is high dps. As are the arrow spray amd poison injection. If you're playing together a lot, try both methods of the spray ability - acid spray, forget it's opposite. My friend and I use this in public dungeons. His spray stops enemies for a full second, my acid starts damage over time. We hit a mob of 6-8 and they stop, then drop. In PVE, two bows working together can be flipping lethal. And if you guys are lower level, equip this then go to a high level public dungeon. Wait for vets to come in and follow behind them spraying. You will mega level.