The problem is Venice is that you need to get hold of strategic resources to achieve this victory. Venice is limited to owning one city and any city you capture become puppet states (which you virtually have no control of what they do), thus making it more difficult for Venice to control land and strategic resources. In order to win Domination victory, you need to get hold as much territory as possible and control a reasonable amount of cities. Also, their UA is more suited for diplomatic victory.
The reason the British and Japanese are suited for Domination victory (even though the folks here see Japanese UA, Bushido, as "being weak" is because they have unique perks that makes them relatively useful for Domination victory). The Zulus, Mongols, Aztecs, and the Huns are well-suited for Domination victory because they have unique units AND abilities that helps them for domination victory (particularly the Aztecs and Huns who are more early game oriented). Venice UA prevents them from expanding and thus not best suited for Domination victory.