Yeah, Theocracies are pretty lame. At least they can try stacking Tolerance of True Faith high enough that they can lower autonomy with impunity after converting land, but they get nothing else of value to compare with the other government bonuses. Meanwhile Merchant Republics get OP leaders, trade power bonuses, trade value bonuses (+trade goods works best in low base-tax provinces too, e.g. Russia), Factions (compare Aristocrats and Traders with fervor bonuses Reformed gets), and free CBs on other merchant republics.
-LA is pretty neat but it's easy to over-emphasize how useful it is. By the time you get even -.2 LA monarchies you're 200 years into the game and therefore probably a pretty big nation with a huge amount of 0% LA land to pull income and manpower from. At that point I'm really not crying over the fact that some 5% of my empire is going to provide 5% less tax/production/manpower for a decade or two. Especially not with how OP trade is in 1.8. Administrative republics get -.2 LA pretty early and that's an interesting niche, though not one that I think is really overpowering.