I had a similar experience with a neutral in a recent game. I had planted a couple of colonies in his system, on worlds he could not colonize, and he was constantly attacking them. I didn't want to hassle with having to invade so I just demanded his surrender -- figuring I'd get it automatically because of the score difference. Nope. Only when I finally sent in a fleet and attacked/blockaded a planet (not even the homeworld, though) did he surrender. I can only guess that MM has added some "minimal amount of damage requirement" to allow a surrender so you can't establish diplomatic contact and then demand surrender immediately.
