Yeah, they might be stupid, but so are mules. Mules are still good for manual labour. Whoever said the conquered would be fully integrated to the empire? My empires always consist largely of slaves, with a small number (perhaps ten million once the galaxy is conquered) of overseers handling the thralls.
When I played, I also used to change the setting that altered damage weapons do to planets. I think normally it was something like 10 damage points killed 1M population, I had it set to somewhere around 10000 / 1M. Then you have to either capture, spend a loooonnnggg time pummeling the planet, or blow it up, Death Star style.
Re: Genocide
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