Surely the Federation would interfere if a warp capable civilization tried to exploit the people inside Federation territory, citizen or not.
er, why would they?
It would basically be like a civil war in the case of the Baku vs. the Son'a, which the Federation frowns on getting involved in.(remember Picard's "blood feud" comment?)
And why would the UFP offer protection to the Baku when they would benefit much more greatly from the Son'a removing them? Especially since the Baku have nothing to offer the UFP.
Because Picard wanted to get laid. That's really all it came down to.