Sauron, Morgoth and the lust for beauty

[Inziladun]

Originally Posted by Leaf

But that's part of my question. That the elves would be useful slaves is true. But useful to what means? And when Sauron recognizes the elves to be the fairest and wisest among the Children of Ilúvatar, he also acknowledges these traits.

Sauron had knowledge of the Elves from their beginning. He knew of Morgoth's capturing them, likely using them as a template for Orcs, and forcing them to work at Angband. As the Firstborn they had the most power of all the Children, and the immortality and immunity to sickness they possessed would have been attractive.
Sauron, in fact, did bring about a plague in Middle-earth, which allowed him to re-enter Mordor. I'm not saying that was a prime motivation for wanted to enslave Elves, but perhaps a small part.