I personally love the layer of complexity Loyalty gives, with a region having a different stat for every Realm. It is also realistic that if you loot, murder and rape today, tomorrow you will have a more difficult time having the peasants accept you.
If not on Realm-level, Loyalty could be determined on a Duchy-level, giving even more reasons not to switch between Duchies as if it were an everyday event (as Loyalty would take a hit, unless you are moving to a much more loved Duchy). It is a compromise between the unreal nationalism-Loyalty we have now and the much better lord-Loyalty of medieval times (similar to a claim).
I hope if Loyalty gets removed in the current format, it comes back with something like that later.