Well thay MAY be the exact problem actually. Too powerful direct vassals=higher possibility of revolt, too powerless vassals=infinite infighting. Although i DO believe you can somehow force your vassals to have too little troops by maxing out all laws, the side effects certainly make it worthless. I do have an idea about what can be done though:
step 1-)Make sure your ruler is REALLY old(60-65 etc. but having him TOO old may also mean that he dies before the process is complete=FAIL)
2-)Revoke every single duchy, county and barony you can. You will get -100 opinion with all vassals however since they aren't counts or above now, the game simply won't care about them.
3-)Change succession law.
4-)???
5-)PROFIT!
That is, unless the accumulated cruelty maluses carry over to your heir, in which case you are...fornificated?
you get what i mean though.
((There is a workaround, simply get infinite numbers of minor nobles/debudantes/holy men to take over from where your vassals left. and you'll be fine.))
IIRC, Having too large a demesne actually gives you a negative income modifier--I think that having 2x your demesne limit gives you basically 0 total income (Correct me if I'm wrong, though)
However, revoking titles is a crucial part of maintaining control over a large kingdom--if used at the right time.
I usually end up dividing each ruler's rule into several phases, the length of each phase depending on their relative power.
Phase I: The stick and the carrot (or patrimony and tyranny)
Whenever a new ruler ascends, you have to figure out which subjects are trustworthy and will be your allies, and which ones are conniving schemers that will cause you nothing but trouble. Anyone with a large duchy and a generally positive opinion of you, or other necessary traits (easy allies, your firstborn child, anyone with a good claim), you want to improve relations with as much as possible. send gifts, bestow any unnecessary titles, and get relations high with them. High relations are crucial to having large levies from your vassals.
Anyone with impossible demands (such as "desires duchy of x, y and z" at -25 relations apiece) or with the ambitious trait (a whopping -50 modifier to relations) I assassinate, imprison or revoke titles.
Fill your cabinet with trustworthy advisors and KEEP your relations with them good (ESPECIALLY your spymaster, otherwise he'll plot against you).
Phase II: expand & change laws
Once you've solidified your support base, picked your allies and neutralized your enemies, it's time to expand. Push claims for your powerful vassals (which, additionally, gives you a significant relations bonus), fight infidels for the religious bonus, and reward your favorite vassals with virgin land. Any land that you don't immediately need, bequeath to your heir so your other vassals won't fight over it, and so your next generation ruler has extra titles and a large demesne to start with.
If your vassals fight each other, you can end most wars based on an individual's claim by assassinating the bearer of the claim. You can also give holdings to whichever side you want to see triumph. Also, avoid allowing regencies take control over counties or duchies, as they're susceptible to weaker claims.
Phase III: Paranoia
Once you've expanded enough, met your goals for that ruler (including law changes), start getting old and fearing for your death, it's time to become a paranoid old coot. Start thinking about who's going to cause trouble for your heir, and revoke as many higher titles as you possibly can. Try to avoid rebellions, but hateful vassals isn't always bad because eventually they'll just assassinate you and you can start meeting your goals for the next generation.
My biggest problem with this strategy is that if you assassinate/execute your vassals, you're more likely to have regencies and other vassals pushing their weak claims--but I'd much rather have vassals fighting each other than rebelling against me.
