Ghal, I seriously never had a problem with Serana's involvement on the Dawnguard side.
To me, it made sense: You've been banished from the castle, and she now faces spending all her time with people who she doesn't get along with at all, so she decides to seek out the only person she knows of who's been moderately nice to her-you. That it takes her from the company of people who are mean to her, to the company of people who want to drive a stake through her, is part of her character development. It's the sort of thing a naive, immature girl who's lived her entire life first inside a castle then sealed inside a crypt would do, it shows a complete lack of perspective and rash decision making.
My Dawnguard characters aren't vampire hunters so much as they see the DG as yet another way to fulfill their heroic duties. They don't hate vampires with any particular passion, so they react to Serana as they would to a normal human with her personality. They try to redeem her.
I see curing her as the culmination of this, as reclaiming the soul of this poor girl from the abyss. There's all sorts of interesting RP you can do with her on the Dawnguard side.
My character did join Dawnguard for the vampire killing, though. And independent of that, I think it doesn't really work that a pack of vampire hunters set up a castle and begin building a legion to kill vampires, and then let one waltz in for a chat. And as BlueNinja said, I got to pick from being a vampire hunter or a vampire, and I picked a vampire hunter. I now have a vampire as a forced companion, whom I cannot tell to stay put or part with. It's not what I wanted.
I like that you can apparantly encourage her to be cured, though. (I didn't know that, been dodging spoilers, but no biggie.) As I said before, I'll step back and look at the story overall, when it's over. And that may well make me revise it. But it was just so jarring to be all "yay let's kill vampires" --> *forced vampire companion* that I'm not there yet.
Just from a pure gameplay standpoint I hate having companions - I never accept one if I have the option - and it's driving me bonkers. I just became the thane of Dawnguard, and got my housecarl. I've been working on that for a while, because I want to hire a wagon to shuttle me from my home to the rest of Skyrim; the house is in the middle of nowhere. But I can't have my housecarl follow me to my house and thus hire the wagon, since I have a forced, non-separable companion in Serana. Combine that with my desire to explore the ethereal Soul Cairn alone, and my dislike for her is starting to grow despite her charming personality. I can't wait to be rid of her.
People do have better-designed battleaxes now than they did 2000 years ago.
But in answer to your question, no. It's part of the suspension of disbelief that comes with every fantasy world. Complete lack of technological innovation is necessary in order to produce the everlasting medieval setting.
I'm not sure where I read this, but I think I read something from Bethesda a few years ago that touched on this. Not sure if it was Bethesda, but it's always made sense for me. They said, in essence, that magic is the technology of their world. We don't have magic, so we focused on developing physical things. The ES world does, and it's so amazing that it is the space where most "technological" evolution takes place, and mechanical technology stymies as a result. Magical enchantments, spells, portals, etc. are the technological innovations in this world, and wizards are the engineers.
It's obviously a self justifying explanation, as in the end they simply want to make a game set in a certain kind of world, but I thought it was interesting.