Plus when you think about it, DS9 was a backwater installation when it first got filled with Starfleet people. If not for the wormhole, it would still likely be a backwater post. So it's quite possible that the promotion for O'Brien wasn't intended to be as glamorous as it sounded.
Going a bit off topic here, come to think of it, it's actually weird that Odo was 'accepted' as chief of security as easily by Starfleet as he was. For Kira, at least she is there in her official capacity as (chief) Bajoran liaison officer. But why wouldn't Starfleet just have sent over a Starfleet chief of security immediately? It's a fairly critical position after all, and Starfleet can't have been comfortable having the same guy there that already served under the Cardassians ....