Yeah, empires like Renatus weren't that bad as they acted more like protectorates.
Protectorates are fine, kingdoms are fine. The thing is, this has to be done through diplomacy and RP, you can't just FORCE people under arbitrary systems to be vassals in exchange for land. It doesn't make sense IRP either since anyone can just settle wherever they please, especially when a map is this big and unclaimed land is so abundant.
When I say empires I'm being hyperbolic and reffering to times where groups like Oren, Malinor/Haelunor, etc went too far and tried to steamroll every core race/non-human vassal to extinction, etc. Promoting player agency is important, if they want a big human empire they need to be competent enough to keep it together and stop balkanization from happening. They can't rely on arbitrary rules to stop vassals from rebelling, leaving, etc or people just flat out being independent to begin with.