I'm not going to comment on the particular terms offered to Caligus (although, from what I've seen, they stood to gain as much land as they'd lost),
In defence of the terms that were offered, they ensured that whether Caligus accepted them or not, warfare would continue on the East Continent, which is a good thing. It would have been easy to design terms that would have been both acceptable and lead to peace, but it wouldn't have been fun.
