Kruelgor
Emperor
Happiness isn't just "How happy people are" in game. It's a measure of public order, reflected by how the average citizen feels. When you conquer a city, it causes your empire to become more unstable until you can establish a working government (in-game, the courthouse).
It's a game, it's an abstraction. It seems to work well as a game device, and that's really what matters.
If it works well in the game then that'll be great. I definitely understand the instability which comes from a conquered city.