Factions literally have fleet doctrines governing, among other things, ship quality. Pretty sure you find more d-mods on Luddic Church ships, nor advanced ballistics like gauss cannons and HVDs. And the LG's ships are not even that bad when properly outfitted - if you hate the low-tech playstyle you may consider the entirety of luddic church and much of hegemony's roster to be "trash."
This doesn't matter for the player, though. You can buy pristine LC ships from the Knights of Ludd market on Hesperus, and all the weapons the LC has access to are similarly available for purchase. Not so for the Sindrian Dictat; you can't buy Lions Guard ships pristine or otherwise, nor their weapons.
I agree it was a bold choice because it is somewhat different to how the other factions are mechanically represented, but I think it goes a long way of making the SD stand out and is also both a plausible and darkly funny subversion of how the other factions work - the elite fleets being generally inferior to the regular forces, not due to massive mechanical debuffs, but due to doctrinal issues and overambitious loadouts. Which, on the other hand, is not all that different from PL being limited to DEMs or tri-tach being limited to hi-tech hulls and equipment (technological innovation at the heavy cost of flexibility!)
This subversion doesn't make for good gameplay. These mechanical representations of other factions are the way they are for good reason; Lions Guard fleets being pushovers makes killing them to loot their weapons and ships a boring chore rather than an interesting challenge.
I do agree that it is kind of *** if there is no benefit for the SD commission as I read in another threat, despite my strong negative feelings towards authoritarianism I think there should be some upside to pursuing that option.
Correct. Even Pirates and Pathers have good unique ships that a player might want to buy and use, including refits of existing ships which add capability, different weapon slot layouts, or built-in hullmods at no OP cost, with no downsides that don't go away after a restoration. LG ships have base OP penalties which never go away, and their unique slot changes are generally useless aside from the Executor's.