Lower tech is a reasonable penalty, civilisation is normally a required precursor to decent technological advance.
I agree, but what we have here is a barbarous
civilization. To make a (somewhat poor) analogy, take the Aztec's. They are people known for constant war and large scale human sacrifice; who also instituted public education for the masses and preformed (very limited) surgery under anesthesia. Barbarism does not imply a lack of technology, but rather a lack of refinement or high culture.
I understand what youre driving at, however; disorganized peoples arent as innovative or creative. Still I feel that a reduction in culture or an increase in maintenance costs would be better for game balance. Being at peace with the barbs really isn't much of an advantage beyond the very early game, (even with raging barbs and barbarian world turned on). Of course a successful rush strategy would allow the game to end very early, and then the technology lag wouldnt matter much. However, that makes any civ with this trait VERY one-dimensional (actually two civs and three leaders), as they are very poor performers in the late game where a tech lag is crippling.
By contrast a lack of culture (or GPP), or higher maintenance costs are still a major setback, but allow the barbarous leaders to maintain a military campaign late in the game, as they are very likely to do. It would also make the Clan less likely to build the Alter or flip cities with culture, (which happened to my annoyance a few games ago; it's very, VERY hard to accept, logically, that a human/elf/dwarf city would prefer to be run by an orc or a beast man)
I do agree that whatever the penalty is it should stick around even after the barb's renounce you, the people arent instantly going to become cultured. I'm not sure that having a high score is a good reason for them to turn on you though. Ranthane (sp?) converts barbarians because he IS stronger than them and they want to be on the winning team. Having them turn on you later because youre TOO strong seams ridiculous. Being too far up the tech tree (or having too high a culture in your cities) would be more in keeping with the flavor of the trait, because you would need to actively work against the societal aspects that mark you as a barbarian.