Not all Elders are like that, but the vast majority is. To understand the logic of those Elders we first need to realize their nature; they're mostly priests and politicians that don't benefit from intra-SA fighting, cause this diminishes their power and authority. Primarily authority. But on the other hand, they're eager to declare a crusade in those areas where SA's influence can spread and they're doing it to gain authority over larger mass of followers. For successful crusade means more people to do their bidding. It is a gutless politic of convenience that has no similarities with anything that can be considered spiritual. I find it highly amusing that this method backfired and that crusade in Terran has done more damage that what is worth.
From Leopold's perspective, the fact that the Elders are twitching and turning to appease him to rejoin the theocratic family makes him chuckle a bit. The Elders are on their knees and the fact that they bended so easily is another testament to Leopold of their spineless politicking. In the old days, to do what Leopold has done and get away with it would be impossible for the Church has been much more stricter then, but also more righteous than it is now. Now, the Elders seems to be run by characters who endlessly scheme to have their way ( I think some have labeled them as southern republicans ). I think there are a few of such characters, but I am primarily thinking of Hireshmont here for his trick with Terran is what alienated the relations. The fact that other Elders allowed Hireshmont to get away with it, and that he became the loudest voice that represents the Church is where the Elders have probably made a mistake.
From the perspective of a player, the fact that Elders are chickening out is quite a disappointment. To not keep in mind the pros this war would bring to Dwilight and Battlemaster as a whole is an oversight. Its like no one notices that theocracies are graveyards that boast the least number of characters on Dwilight and that are the most empty and void realms to play in. The goal of any player that has an important position in any realm and continent is to ensure that it is fun for others, too. I will draw a parallel with CE here, and say that Dwilight Northern federative block that is without a doubt intertwined and ruled by SA leadership is quite similar to CE. To bitch about a power block on one continent but do a similar thing on the other is quite a misguided understanding of player responsibility, and is usually done by same people.
In any case, I think that the odds for such a war are nowhere as one sided as the Elders think. The power of the theocracies are great even though they are a bit dormant. In fact, Leopold is making a huge risk for Niselur can easily be destroyed in the process. But I, as a player, am ready to take that risk regardless of the consequences and am driving Leopold according to that. I really don't want to have a King in the a** of the world that will never amount to anything or matter to anyone. I've built a massive IC story to further these goals the best I could, and the fact that the Elders are going great lengths to remain in the status quo is making it more difficult. But luckily for the players of Dwilight, the decision no longer rests in the hands of the Elders.
