Really, squalor? A problem for barbarians?

I've never noticed that. Could be because I always play short campaigns as barbarians in RTW -- I find it unrealistic for any barbarian faction to directly control 50 provinces. Still, I just did a Britannia campaign where I literally did no invading, except to take Ireland (I had modded the game so Samarobriva starts as rebel). I waited until the Julii made it up through Gaul before I made my move onto the mainland. Must have been between 60 and 80 turns of just building and waiting, and I noticed no significant problems, squalor or otherwise.

Which reminds me: Britannia would definitely be a good faction to turtle with!