Two things:
1) I wonder if there's a connection between Dragon and Tenryuubito beyond simple "rebel vs government". IIRC, Tenryuubito translates to "People of Heaven's Dragon"... so what we're seeing is war fermenting between two dragons. It's just a wild guess, but isn't it possible that Dragon was a former Tenryuubito?
2) From what we've seen of world in One Piece, national governments tend to be corrupt. You have cases like Albaster with good king, but vast majority of royalties presented on other islands seem to be pretty corrupt (human auction was attended by people with crowns, after all... and let's not forget kings like Walpo from ice / snow land or nobles from Luffy's home island). Sure, Tenryuubito may seem worthless, but they're not acting all that differently from any other royalty, all things considered. Perhaps they may seem more cruel, but that's simply because they have more power. If any other royal family had similar power, you can be sure that they'd be doing similar things.