Hmm, this is a fairly tricky problem... I can argue that this scenario
can be no worse than the scenario where the peasants decide to up and
attack the castle all by themselves, though. Perhaps it could be set up
so that a failed rebellion still increases DISSENT but lowers the Rebel
pool, so that the people are still unhappy (lowering tax income), just
that there is no organized resistance any more. Also, every Rebel that
gets killed in a revolt should be taken out of the province's population,
so after several large rebellions the province's economy would be utterly
wrecked.
I also proposed an ATTACK REPRESS where the lord actively goes out and
seeks to kill off rebels, which would have much the same effect (except
the lord wouldn't get the castle defense bonus).
A lord could still repress his peasants and milk the province dry of
every last copper groat he can get, after which the province is essentially
ruined. I don't think this is a bad thing though, it should be possible
to plunder a province if that's what you want. I think it should be
balanced, though, so that in the long run it is more profitable to hold a
province to a reasonable tax rate and occasionally send out men to
'persuade' down the DISSENT rate.