Despite Charles' protests, Erik does manage to subdue and mostly eradicate humans and build an almost exclusive mutant society. He's oh so proud of it and doesn't understand Charles' sadness. But Charles knows better by now, he knows that Erik's utopia won't last. And he's right. Soon, mutants with physical abilities start rallying against those with mental powers, telepaths, empaths and the like, saying they fear them, what they could do. They demand them singled out and clearly identified so that everybody can see of whom to be wary. Erik's horrified, insisting that they are all mutants, after all - but the protesters point out that he was among the first who distrusted telepaths, even his closest friend, showing it clearly by putting on his helmet and they are just following his example. Erik tries to stop this madness but it gets out of hand fast and soon, telepaths are being hunted down and experimented on to find a way to block their abilities, with Charles on the top of the list as the most famous and strongest telepath of all. With their roles reversed, Erik now tries to help telepaths hide in a society bent on destroying them, basically proving that it doesn't matter if it's a human or a mutant, their natures are the same, and that you can't build a society on usurping the rights of a certain group within it.
So yeah, pretty bleak, huh? But, IMHO, very, very real. I think that in the movie, Charles and Erik were both arrogant and naive. I see people talk about how Charles was wrong when he thought he knew better - but so was Erik, who was equally naive thinking that an all-mutant society could be just, a society of equals.