It's kind of a dick move to joke about the "Wounded Knee Massacre" with regard to the Nords in Skyrim.

It's just another imperialist narrative that erases the true indigenous peoples of Tamriel. The Dwemer, Snow Elves, and Reachmen all have long histories in Skyrim that predates Nordic settlement.

Nordic nationalist groups are engaged in an ideological project that tries to erase the previous inhabitants of the lands, pushing the surviving Reachmen to the most infertile and inhospitable parts of the province, consigning them to mountaintops and infertile lands where they are disconnected from the broader society and economy.

In terms of the Dwemer and Snow Elves, the battle cry that "Skyrim belongs to the Nords!" shows modern Nordic attitudes towards the first peoples: one that erases these peoples from history in favour of a settler colonialist narrative.

To co-opt the "Wounded Knee Massacre" from the indigenous inhabitants is a part of the broader imperialist project. Ignoring the rich pre-Nord history of Skyrim is a disservice to true understanding of the province.

After the great battle of the wounded knee massacre a lot of towns knew that there would be trained soldiers who would need a new job after being kicked out of the military due to severe knee injuries, so they contacted the empire to try and get a job for them with health benefits that included things like physio. This offer looked good to the returning soldiers and boosted the economy and the towns now had trained soldiers protecting them.

Why that battle targeted knees however is still a mystery...

EDIT - Sorry the source is my friends dad called Thorin who was at the great battle of the wounded knee massacre and is now a guard in Riften

A military force needs a wide variety of positions filled. Some are on full combat duty and are expeditionary in nature. Those are your most physically capable and aggressive troops.

Rear echelon troops tend to lack the same aggressive and athletic nature. Guards in Skyrim typically break up unplanned bar fights or lightly equipped theif, Given their equipment and team work is enough to take out a few problem makers. And they can still flow appropriate military customs and courtesies and are under the same military hierarchy so you avoid rivalries that exist when you have a civilian police force as well as a military.

Arrow in the knee is a joke for being married according to Skyrim histlorians

You see, after the Massacre the survivors protested against Imperial powers claiming right to healthcare. Unfortunately, the Empire had given so much of their medical supplies to wandering alchemists claiming to be the children of dragons, they didn't know how to reindorse the victims. Then, General Tullius offered to give all the survivors jobs as guards in the various holds. Many protested this alternative to healthcare, but died soon after. Because being a guard entails uncovering so many stolen sweetrolls, guards are able to regain lost HP due to knee injuries, rendering the survivors who took the guard duties healthy, and the others were refused dead. This is why only guards report knee injuries, because all the civilians that had them died.