The story stated the allagan empire fell upon the earthquake, but that didn't mean it went extinct. There is knowledge that indicates allagan being able to space travel, maybe they colonized the moon. That brings a question to mind, if they could live in flying cities how did the earthquake made them "disappear" from those flying cities.

That is unless the earthquake released so much aether to the air which could be toxic to allagans and the few surviving ones or they mutated or they genetically put themselves the garlean third eye so they don't die from aether poisoning (like mako poisoning from ff7). This is pure speculation.