Upkeep is expensive because of the coffers, which allow you to save gold between DKs, which is otherwise impossible in the game. I am willing to tweak upkeep and coffer withdrawals a bit after we've had some experience with them, but I do not want coffers to give every player level 15 equipment at level 1. That would completely ruin game balance.
Protections are expensive because they are in addition to the usual fight mechanics. Your attacker still has to actually defeat you to kill you, even if you are undefended.
The coffers are not thief-proof, though stealing is not easy. You can also defend your coffers personally by standing guard over them.
Please be aware that castles and, to a certain extent, farmhouses, may be very difficult for a single person to afford on their own. This is intentional. Houses can be used by multiple people, all of whom can sleep, stand guard, etc. If you want a castle, and all the benefit that go with it, you might want to find a few friends willing to share the cost. 10 gems every 12 gamedays is expensive for one person, but it is cheap for 10 people.
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