I wouldn't say he lacks ambition. After all his goal is the total domination and enslavement of all mortals...

Also. Milag Bal's minions took over cyrodil in the Planemeld and practically started a world war. Mehrunes Dragon had to come out of oblivion himself to do some damage to the city. Just by looking at each event, Molag Bal is displayed as being more powerful.

That's true too but since it is a longer time period and happened before the Oblivion Crisis then it gives more time for information to be lost, things forgotten, fears to settle down, and more time to gain followers. Plus Molag Bal has vampires which are good for spreading his influence.

Molag Bal also has Dremora though they are blue instead of red. He pretty much has about the same amount of daedric minions but he ALSO has vampires.

I think Molag Bal would win. Mehrunes Dagon probably has less followers now that the oblivion crisis ended and don't the daedric princes get their power from how many followers they have and whatnot?