The worst part about elves is that they're small and, unlike dwarves, they don't get a corresponding strength bonus. As an adventurer, expect to get charged and knocked to the ground by every opponent.
I assume Toady will get around to balancing them some day, but until then, it's easy enough to mod the RAWS. I used to give them a minimum natural skill in dodge to make them tougher opponents.
If you look in the RAWS where Toady used +s and -s to show which races are better in which attributes, dwarves beat elves in strength and toughness by one +, where as elves beat dwarves in agility by two +s. Agility is basically the most important stat, because once you hit someone once they're at a disadvantage, and agility is tied both to who hits first, who is more likely to hit, and how often you can act. Elves also just have better attributes in general (more +s, and every Elf has literally perfect memory), which is balanced out by dwarves' [TRANCES] tag, which lets them make artifacts and enter martial trances.
In theory, the elves are balanced with the other races. They have reasonable stats in the RAWS and in legends. The problem is that in actual gameplay their wooden weapons can't even penetrate clothe, and they have no tactics besides running up and smacking you with them. In the art rewards and threetoe stories, the elves have used poison, their alliances with various animal peoples, magic, friendly spirits, stealth and forest based tactics like attacking from positions atop trees, but none of these things are possible in game yet.