Sauron was actually lying there dead (or apparently so) when
Isildur cut
the One Ring from his finger.
Yes, but
@JackTorrance is playing the 'what if' game here.
So what Was is no longer what Is, and he's wanting to invent a new 'what may have been' you see.
Thus, nothing is off the table, and what's on the table (which is labeled "The What If table") is what's on the table, and doesn't need to match the facts at all.
Imagine if you will, a world where
Sauron wasn't 'defeated' in said former battle, really does wield a colossal
weapon thingy to smush people with, and after prevailing over the other two,
Isildur approaches and gets smushed. Then what?
OR: Imagine if you will, a world where the former battle happens just as it was written, LoTR really still happens, but Sauron wakes up from his idiotic misjudgment in time to get the
Nazgul to Mt. Doom to snatch
the One Ring back before
Gollum takes a dip in the lava pool? Then what?
This is
@JackTorrance's fantasy now, you see, not Tolkiens.
Tolkien's facts simply no longer apply.
So in his first case, Sauron is not defeated, he retains the one ring, and goes on to rule all
Middle-earth.
In his second case, Sauron reclaims the one ring, and as
Gandalf says, he will then rule all Middle-earth.
This is why I oversimplified both Mr. Torrance's into one. Sauron simply goes on to rule all Middle-earth either way.
He would be infinitely happier in case one, because he'd be ruling much sooner, and doesn't need to bother with all 'the rest of the story'... the saga would be MUCH shorter.
That said of course, we'd need to rewrite a lot of prophecies, change up SIL in several ways, and a great deal more... but well... we'll let Jack deal with all that stuff.