Given that MK4 was before the retcon and depicted Edenia-as-Outworld ruled by Sindel and Kitana as a peaceful place, I think things would've gone the same direction, we'd still have a "boring" Edenia, but no Outworld instead of both.

And assuming they could find away to make the Dragon King's story work in a canon where the guy who ruled before Kahn was already established to be Jerrod, you'd have three games (in a row!) where Sindel gets invaded and kicked out of her throne instead of just two (MK4 and Deception) because the Deadly Alliance would've had to attack her instead of Kahn.
Things are probably better with the retcon. Edenia really isn't as bad off as people think. I mean, it just needed to be more plot-centric, have more main characters/villains of its own. And then Armageddon gave us Argus, Delia, Taven, Daegon, and Blaze's origin. I know they're not popular, but they did make Edenia the main realm for a game. That's enough for me.
I just wish Sindel/Kitana/Jade had ever actually been IN Armageddon Konquest and interacted with these people.
There's also an element of "people think Edenia's boring just because it's a GOOD GUY world", and that's just kind of shortsighted. Thinking good is boring is and darkness is cool is, like, an edgy rebellious teenager thing. If Earth was the ONLY realm in the entire vastness of the universe that was green and blue and peaceful instead of a shithole villain headquarters, that wouldn't be very believable.

Actually, it seems Edenia has been its own realm since MK3.

It is specified that Shao Kahn took Edenia from Sindel and Jerrod, but there is no mention that Outworld was once Edenia.

With that, I say the series would probably not be as good. Having both Edenia and Outworld as separate realms puts things into a much better persepective. A merger explains a lot more than a mere conquering, especially considering the preexistence of various species in Outworld.