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You can only dissolve an empty duchy so generally that wouldn't work very often as most(all?) Duke's are also region lords.
Also, can't loot in your own realm.
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Interestingly, there are more options to use against Dukes now than there were when I last had a ruler. Before a Duke could make it so none of his income was taxable by the crown. Granted, I think that the tax rate applies to all the Duchies but I could see certain rulers still using that power to great effect to harm those Dukes he or she doesn't like while having ways to appease the other Dukes.
I can think of other ways a realm can make things unpleasant for someone they can't ban. Bankers and Judges have ways of 'encouraging' those individuals that might be friendly to the offending individual.
