Two separate issues here that I see.
1) Game vs. simulation. To what extent do you do things to make the players of a game happy, vs. things that make sense for the sake of internal mechanics or "realism" (as loose as that term might be in a fantasy setting). On the specific point of Kingdom elimination, it might make a subset of players happy to be able to merrily cruise along without the ability to be completely eliminated -- even as that mechanic frustrates a different subset of players -- but I think on some level a nod to "realism" might be helpful.
The reality is that Rome completely crushed Carthage, and that Kingdom faded into history. And in a number of games (although perhaps less frequently now than in the past, since a "self-esteem" and "everyone's a winner" mentality appears to have taken root in our modern society), elimination is a real possibility, and them's the breaks. I can see why that is, from a standpoint of realism (again, as limited as that term might be here). If you have a Kingdom vying for the throne, you have people supporting that claim for reasons of loyalty but also of perceived self-interest and benefit. When your troops are being paid, their morale maintains. Fail to pay, morale drops, and fail to pay too often, and you have desertions (attrition). One reason I love Alamaze is that it models these things exceedingly well. Even your own court isn't 100% loyal to you, they might drop a dime on your deepest, darkest secrets, if they're paid enough money!
If a Kingdom gets to a point of having no imperial possessions, no subjects support the Kingdom's rule or claim to the throne, that is going to have follow-on effects on the rest of the Kingdom's assets. Even if a foreign power takes over payment and feeding, troops start to wonder, why am I even fighting for this cause? Isn't it hopeless? Am I really ready to give my life just because some powerless ruler with no holdings is telling me I should? Meanwhile, individually powerful, incredibly intelligent wizards would have to start wondering, why don't I just take my show over to the next court?
It would be neat if there would be some kind of dynamic similar to the old "Marriage of State" where two Kingdoms could simultaneously order a "Dynastic Succession" or something like that, a public declaration where if one of the Kingdoms is eliminated, the remaining assets make an individual roll (maybe 50%) and the ones that succeed are transferred over to the other Kingdom, with the remainder representing desertions or individuals "going private" and bowing out of the Great Game. That way, a player on the ropes could feel as though he or she is still making an impact on the game (and perhaps even spiting his oppressors), while still accepting the reality that the particular Kingdom's time in the sun is over.
2) The tendency of gangups in diplomacy games. I know it frustrates people sometimes, but more often than not, I see this happening as a result of either an unwillingness to spend the -- at times very significant -- time that it takes to conduct diplomacy, and even more, the time that it takes to learn and develop and become an expert at it.
If there are "pre-arranged" alliances between individual players such that they always or almost always work together or similar things like that, I think that really stinks, and I resonate with the complaints on that score. But my own personal sympathy toward people who aren't willing to take the time to conduct diplomacy, my sympathy really plunges. And I do think Anonymous games are indeed better for people who don't want to spend that time.
Please note, this isn't a value judgment, in the sense that I fully acknowledge that we all have limited hobby time, and I totally respect that people might not want to spend that limited time sending out e-mails and tracking NAPs and things like that. I would just hope that on the other side of it, people who choose to enter a full diplomacy game would understand that they will be FUNDAMENTALLY AND INHERENTLY DISADVANTAGED if they choose not to engage in it, or to engage in it only very sporadically.
Anyway, I said in another thread recently that I can tend toward the geeky sometimes, and this is probably another of those times.