Exactly. I can't see any reason not to be able to do it and I think it adds some options for provoking people. What I like about it is you can provoke another realm with or without your ruler's support; just go ahead and arrest that priest. It also adds something to religious conflict. When a particularly zealous character decides he's offended by the preaching of that idolater from the realm next door, he has a way to vent his righteous anger, and he can do it with or without his ruler's permission. I'm a fan of anything that gives the average knight more ability to stir up trouble for their rulers.
You can argue that the ability to loot anywhere is good enough, but it's not the same. Looting is essentially a crime, and therefore almost impossible to justify to an angry realm council. Arresting a priest on the other hand can be done on principle and is therefore more defensible when your ruler gets upset at you, plus you may be able to get your co-religionists to back you. See? More conflict, politics and intrigue.
More of a discussion for the development thread at this point though.
