You do realize that Medron was in Tara right and that he wasn't really what you'd call "the old guard".
And yeah it's normal for Dukes to have that much power. If the majority of your realm is however 'against' them you have some options as the ruler. Those Dukes that do not follow the will of the nobility, ban them one by one (reclaim city before you move to the next) for what ever reason you want to. If said Duke is a royal (prob a few in CE's case) you have them stabbed in stead by infiltrators. Once the infil succeeds, you can appoint someone else as Duke. You can prob do that once and then some of the Dukes either rebel, or do something else. But with enough people to support this (as you say the whole realm except the Dukes pretty much) either the rebellion fails, or they form their own realms. In both cases you would have made Atamara much more fun. It's easier though to blame others and not look also at yourself.
You make it sound much, much easier than it was. I had a lot of people agree that Atamara sucked, but weren't willing to "change their characters" to make it better.
