I think for the reasons people have said, that it is really quite complex and so there isn't always an easy answer.
For me, there are a lot of plusses for vassalizing. The three palace resources are very nice. If you play on a high level, your vassal can effectively build troops faster than you can. If you take the cities, your maintenance can go way up, especially if you don't run city states.
It really pays to be good to your vassals. If you can, trade for their resources, give them techs, etc. Since they are your allies, help them be strong.
Vassals that don't like you can be a pain. Expect them to build privateers to attack you and other nasty things!
For me, the best reason to take out the civ is that the city can itself be good and integrated into the economy. It may, for instance, have wonders that would really help.
Another key reason is the unhappiness of the captured cities while the other Civ is alive. This can be a major pain the neck, and if I fear it, I usually try to eliminate the Civ.
No question, diplomacy issues are complex.
Best wishes,
Breunor