Nah, the peace treaty makes perfect sense. As long as this Sith emperor keeps an external threat present, internal strife is much less likely to emerge. It also gives the Sith time to "digest" their conquered worlds and set up the mechanisms that perpetuate their rule. After all, it would do the Empire little good if it were to, by treaty, take the entire galaxy when half of it was unconquered in the first place and thus likely to rebel before all the systems could be brought in line.
Wer mit Ungeheuern kämpft, mag zusehn, dass er nicht dabei zum Ungeheuer wird. Und wenn du lange in einen Abgrund blickst, blickt der Abgrund auch in dich hinein. -Friedrich Nietzsche, Jenseits von Gut und Böse