So, just to be clear: you feel it's a "grave mistake" to not make your game frustrating (not challenging, frustrating. Frustration is not an emotion you want a game to evoke) to the vast majority of potential consumers. Got it. Are coalitions inherently a better solution? Am I 100% happy with them? Would I, myself, be averse to more challenging internal struggles? No. But that's not what I've taken issue with.
Your opinions about what kinds of games you enjoy are perfectly valid, but they are also subjective ones. Paradox is not making this game specifically for you, and calling a decision made for perfectly rational reasons a poor one is ludicrous. Furthermore, CK2 is a strategy game - there is absolutely an expectation that things that occur should, as long as you play competently, all be able to be managed. While I'm sure your response here would be "losing territory is just a setback to work through," that's absolutely not what the majority of people get out of that. People tend to feel like losing territory is not simply a minor setback or delay in your goals, it's actually losing progress. To deny that the opinions of these people are just as legitimate as your own is to engage in gaming elitism, which has always struck me as among the dumbest forms of elitism.
Sure, if they're already putting in game options, they might as well include something for more difficult vassal management (however that's implemented). But again, to call a decision to make a game that many people would be able to enjoy instead of just the small subset with your specific tastes on what makes good gameplay a "grave mistake" is insane.