Are you unaware of the blatant and ridiculous ways they abused the family gold system and new characters to get several thousand (I believe in the tens of thousands) gold?
Yes. So? Gold alone doesn't recruit an army, soldiers don't pop out of thin air. And family coffers eventually deplete themselves. As long as there weren't any multies involved (which honestly would seem doubtful to me, but I don't know much of the situation), I don't really have a problem with families massively funding realms. It's not a limitless supply, after all, and someone somewhere is paying for that support.