That's just... so backwards! By everything written in fiction and mythology, the goblins should be the ones who breed like crazy and have horrendous, constant infighting. And the elves (again, according to fiction and mythology) should be mostly civilized, with infighting being almost unheard of, and should breed very slowly in comparison.
with what another person saying that it isn't quite folklore your forgetting several aspects.
1) The Infighting while fierce wasn't a remake of Fightclub where Fight was replaced by Murder.
2) Even when it was a constant blood bath, usually there stepped up a leader who could quell such a force.
Heck one movie I saw the goblins were generally ignored as an organised army because they never really had the momentum to ever continue an attack. However strong leaders who could rally the goblins were nearly unstoppable since the Goblin armies were actually better.
The problem is that Goblin societies arn't so much infighting as constantly unceasing murder pits... and even a Leader doesn't even make a dent in this (In fact when the leader isn't constantly being killed off themselves... they are... constantly killing people off themselves)
The Goblins are the most ineffectual force EVER! and Toady just keeps heaping on undeserved advantages because they need to be a threat. I am sure this will be fixed up later though, and some of their better advantages were unwritten because the current coding wouldn't allow it... such as the lack of troll armies.