Reputation is important - you also need to apply pressure to them anyway you can, have huge armies in their borders, block their ports and offer them money. Of course the reason it isnt worth it is because the *vassal* can get out of its *vassal* position anytime it wishes. The whole system was introduced in RTW as a Senate mission IIRC and not for much else it seems. The benefit is that a vassals lands are counted as yours towards your victory conditions IIRC. Nice feature - poor implementation imho - they should have made it as that a vassal needs special conditions to get out of a vassalage - not anytime it wishes. In the end it works as another exploit for the player in a game full of exploits for the player - gah!