I think the current Gov system is pretty good. You need to evaluate who you are putting into those positions, make sure they are good to go, and then actually work with them. While an appoint and fire system would be more realistic, I think it would make the game more boring and prone to overbearing tyranny.
What I think would be a good thing for this scenario would be a protest option for Dukes. If they suck and sit hoarding gold, protest them out, like any other major position. They are really only second in power to the Ruler, and about equal to the Judge. They should have the same protest options.
