I'm no history buff, in fact I hate history. And I do like killing other civs in the previous civ games (haven't played Civ3 enought to get that far yet). But culture flipping makes sense. As a game rule, it just makes sense. You can say it doesn't because you don't like it and because "in real life ...." Well guess what? In real life you don't have EVERY trade last for 20 turns between nations. In real life you don't have a single, non-changing currency that all civs use for the entire history of the world. If you want a game that imitates life 100%, you'll be waiting a DAMN long time.
Some societies have changed allegience for military reasons, some for cultural reasons, some just out of fear. Civ3 addresses all of those in one single idea, called "culture flipping". It may be abstracted, but so is most everything in civ3. I mean, cmon, can you really garrison a single rifleman in a city and have him subdue a hundred thousand unhappy people? Probably not. Things HAVE to be abstract to some level or another in a computer game.
Anyway, MOST societies will rebel against the enemy when first captured. OFTEN they will eventually win. ESPECIALLY if they don't like the culture of their conquerers. (Culture being an abstract idea of a society's ideals, values, etc. and summed up into a single concept for simplicity) And if the rebellion is successful, the troops in the city will likely be killed or driven out. And some troops may even sympathize and join their so-called enemy.
It simply isn't a matter of whether or not it's "realistic". It's a matter of whether or not it models something realistic. If you don't like it, that's unfortunate, but the idea DOES make sense. And it means you will need to change your strategy. Cultural improvements will help slightly, but if a persian city is captured and the persians liked their old culture (backward or not), they will try to realign themselves... sometimes with success, even if you are stronger, bigger, more advanced, etc...