I agree, palaces are pricey. But, if you are churning out all the units you need, building all the other buildings you need, and still have koku to spend ... might as well build palaces, particularly in the provinces that are producing low-morale units. That's how I look at it anyway. By midgame I'm usually producing a ton of koku. I still produce the best dojos first though in most cases (Owari being the only consistent exception, given its +1 honor bonus to ashigaru--both yari and teppo).