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I had 'no essential characters' mod, on my game - fresh out the gate Ulfric Stormcloak bites the dust.
In the bloody battle to ensue Alduin is seriously harmed and must flee Helgen to lick his wounds. Standing the the flaming ruins of Helgen the remaining Storm Cloaks tell me to go to Windhelm and speak to Galmar Stone-Fist about joining the rebellion, and while a serious blow has been dealt to them with the loss of Ulfric they seem more determined than ever that a free Skyrim is the only way to go. They all believe that the return of the dragons means only that Talos is angered by the Imperials, and with Ulfric the first martyr of the war the future seems uncertain.
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So far killing him has only allowed me to bypass one or two dialogs - so overall not as big a deal as it sounds. On the actor list you'll see why, there are several version of him. When you trigger a new global setting by completing some mission a different version of him (up to date with your quests) appears anyhow.