Domination gives you the option to expand, not directly by taking world or vicariously through your Federation partners, but by subjugation, building a space feudal system where most of your neighbors serve you, integrating only when the size and numbers of your vassals require it.
Since Unity cost for traditions is adversely affected by the size and unhappiness of your Empire, being able to expand your Naval Cap by vassals, gain more money from tributaries, and have high-skilled governors providing happiness bonuses to your sectors and planets will let you stay physically small for better Unity costs while still conquering the galaxy.
