ok so first off: the name of the expansion LOST DEPTHS

and at the beginning and end of Graven Deep we get some clues.

But first you have to kill some poor little buff boi who gatekeeps to get there, you know the euphotic gatekeeper (aka upper gatekeeper). This gatekeeper throws his op gift at random people that can pretty much kill them if they don't get rid of it but they kill hadolids. Hadolids, in case you didn't know, are crustaceans- bottomfeeders. So before you even step foot in the dungeon proper you got to get past this gatekeeper surrounded by his groupies, bottomfeeders, screaming on his behalf, who can't take the gift he gives.

but wait there's more

There's these pipes, right? and they channel magicka for some reason to some lich at the bottom of the ocean, right?

Zelvraak taunts you throughout the dungeon if you do the extra bosses with quips like "Such a difficult puzzle isn't it" and "I can't fix that!" while laughing to himself.

And when when you get to the bottom the boss is literally stealing your abilities and draining you further and dealing a bunch of dps. The boss is also beset with mechanics- mechanics that people have literally been asking for, in addition to being a difficult boss to begin with. But if you did the extra stuff you can kill the boss and his chonky summon with mechanics that the tank can activate to chunk down his hp.

We are still left with the "why" of what Zelvraak was doing. No bad guy does something without thinking it's a noble cause or without being controlled by someone- but even that someone has a reason to why they do things. Maybe he did it because he needed the extra energy to live longer, or maybe he was gathering energy to kill everyone and sees everything as beneath him. Maybe he just wanted to master all magic.

I'd like to think he was trying to save Tamriel from itself, he saw beings from above being too powerful so he took some of their excess dps energy from them, he stole some of their sun and thought they wouldn't notice.

Thus, I conclude, the human devs didn't nerf your dps, and that Zelvraak did.

Theoretically of course.