They said ignorance was bliss, but Damon realized how wrong they were. What you don't know will definitely kill you, and that was why he decided to learn everything possible.
While the world was made to believe the Highmen always existed, Damon knew that was false. After their first defeat at the hands of the old gods, efforts were made to manipulate history.
Selecting four humans, these deities enhanced them with blessings, creating the God hunters that exist today. When the Sanctuary of the Fourfold Vigil officially formed, Damon didn't consider them a threat because he had just established the Human Empire and even the human emperor was his student.
The werewolves were his mercenaries and he still had the mighty Palace of the Dead located at the center of the world. His defeat came from his unwillingness to learn beyond what he should.