Whose to say it isn't exploitable? Park Sizemore and Maggie in a small city and have them raze and rebuild the town several times over. It would probably cost you some smuckers, but with linked casters it might be worth for power-leveling. If you throw in a Dittomancer or Moneymancer (outside the link) you might even be able to turn a profit. That could be a game breaking combo. I think Parson needs to look into leveling himself at least after this fight. Granted he should have a bunch of prisoners left in Spacerock.
Still there hasn't been any indication that your ruler's level affects anything. It might though, because promotion to ruler would kinda kill Transylvito otherwise. I doubt they have anyone left who could replace Caesar's bonus.
We know coupes can happen we just don't know the mechanics. "my son...he made a play for the throne. Didn't work out for him." so which tells us nothing at all.
We don't know if it's even possible to declare yourself barbarian. If Caesar can't turn barbarian, the only things that could work is an alliance break, like Gobwin Knob, or quick assassination. Bunny's the only one who could take him by surprise. Don probably doesn't know about their love affair.