>>64163541
Humanity technically lost, and the Elites decided to set up the 90% destroyed earth as a "preserve" for humanity, which was nearly extinct. Most of this was retconned later to try to reset the setting back to an endless vague middle state we've been living in ever since.
The prophets were never going to accept humans because they had basically pulled the wool over the elites eyes and the charade was finally falling apart. Humans registering on scans as Forerunner, being able to work forerunner technology, and in original cannon BEING forerunner, would have completely annihilated the illusion that the prophets knew what they were talking about.
It's hard to say what the role of humans would have been in a hypothetical covenant where they didn't threaten the prophet's position, because the prophets still constantly fucked with the covenant races to try to keep them in check, restricting doctrine, industry, and education to hamstring them. However it's also the case that most of the covenant races violate the rules of the prophets to varying degrees.
The prophets might do something like force humanity into obscene attrition rates to lower their population, or deny education or proper nutrition to most of them to make them crazy and stupid.
Barring the prophets intentionally nigrifying humanity we'd be far more useful as low level officers than as meat waves, something the covenant is kind of lacking.
