It would have been tricky to annex more than we did -- we got as much land with as few Mexicans as possible.
Back then Monterrey wasn't much of a city, and Baja was pretty damn empty. So, the border could have easily run quite a bit further South. I guess, Tampico and Saltillo would have to stay on Mexican side, but there was still quite a bit of land that didn't have much of a settled population.
Of course, annexing lands around to the South of Texas would have been very hard to digest, but not because of the Mexicans: more because you might have been able to grow cotton there.
Baja California Sur still isn't densely populated, so why not throw that in, too? Mexico didn't even give them statehood until 1974.
