Re the OP's question: No, DS9 should
not have ended with a Dominion victory.
The show was already rushing to tie everything up at the end. A Dominion victory would have prevented many, many threads from getting tied up. And they would have been no guarantee that another series would happen. They'd be rolling the dice big time. And if they lost, we'd be stuck with an ending that'd make TATV look rosy by comparison.
If anything, they should have started the war a year sooner (which was their original plan, I believe), and have the Dominion win in early season 7. Then have the rest of the show be about throwing off the yoke of the Dominion, with the finale seeing the Feds finally drive the Dominion back through the wormhole. They could have been really bold and compressed several years into that season and done some really interesting stuff.
But end the show with Weyoun and Damar (or Broca or whomever) winning? Nope, not for me.
(Hell, actually, if they were gonna do the war sooner, I'd have the war start at the end of season 4, end at the beginning of season 7, and have the rest of season 7 be about the recovery. The finale would depict Bajor coming into the Federation. Now
that would have been good full circle stuff from "Emissary.")