And you think for a moment that “exposing a corrupted government” isn't going to come at a price? The guards found out who was behind this fiasco, and killed him, and since the Dragonborn knew too much of what was going on they took him to the mines. No I'm not justifying this. The government in Markarth is corrupted, but what good came out of this quest? If you let Madanach live, and allowed him to escape the mines, you now stir up even more chaos against the citizens of the reach by making the Forsworn even more powerful, since they now have their leader to lead again. Sure Thonar is dead, but you still have 1 remanding living Silverblood alive to take over the family business.
Wealthy + Power = Main ingredient for corruption.
Oh and one more thing
Ysgramor is the fabled hero that started the legendary group of warriors, the
Companions. With his five hundred Companions and his great axe
Wuuthrad, he drove the Elves from the harsh, vast land of
Skyrim and claimed it for mankind. Taken off of
Skyrim:Ysgramor - UESPWiki
The
Forsworn, also known as the
Reachmen,
Witchmen of High Rock, and
Madmen of the Reach, are a tribal group of racially-mixed (but primarily
Breton) ancestry who inhabit
the Reach in southwestern
Skyrim. Taken off of
Skyrim:Forsworn - UESPWiki
What does this tell you? The true natives of skyrim are the snow elves. The nords stole their land, and now Skyrim (all of it) is the home provinces of the nords. It's safe to say that the Forsworns aren't the true natives of skyrim, not even the reach. Since the Forsworns are primary Breton, why can't they go back to High Rock and declare a chuck of land from there theirs? The nords aren't going to let some group of bandits take over a region that they rightfully own.
LOL are you serious? The Silverbloods essentially owns Markarth. It's the same deal with Maven of Riften, and Erikur of Solitude. I highly doubt that Thonar will ever see the headmen Axe. All 3 have the guards and the Jarls in their pockets.