I've been quite successful in using protectorates in my Seleukid campaign. Granted, I did use the force diplomacy mod to make the factions submit after I'd fought them to the brink of destruction. At first I had much trouble with my vassals conspiring with other factions, allying with them then starting a war and backstabbing me. But I learned how to counter that by keeping careful eye on their alliances and striking first against those factions.

So if you have a protectorate that has a nearby ally, you should start a war against them because if you don't strike first they'll build up an invasion force and attack you - and when that happens your protectorate will backstab you.