This never made 100% sense to me, but it was a relatively small logical concession to serve the story.
Yeah, it doesn't really track that Bajor would just allow the Dominion to have not only a massive military presence on their station, but also be running the station themselves (with Kira still second banana.)
Was it a concession on Bajor's part in order to get the Dominion to sign the treaty?
The Dominion-Bajoran Non-Aggression Pact was already signed. Allowing the Dominion to occupy the station was a concession on Bajor's part to avoid the Dominion deciding to disregard the pact and just invade Bajor while they were at it.
I mean, maybe. But it's a pretty massive concession that immediately renders Bajor as a massive junior partner on utterly unequal footing.
No, the fact that the Bajoran Republic
is a massive junior partner on utterly unequal footing is what creates that situation. Bajor just
does not have the military capacity of the Dominion. They have no capacity to enforce their sovereignty over the station if the Dominion wants it. If their primary goal is to persuade the Dominion that invading and occupying Bajor is not worth the effort, then realistically they have to agree to whatever legal fiction the Dominion concocts to "legitimize" its occupation of the station.
But given how steamed Kira got over the idea of Romulans having weapons on a Bajoran moon, you'd think she similarly would have had issues with the Dominion staging their massive fleet in their space and being in charge of their station.
Of course she did. But the situation with the Romulans standoff over Derna is different.
First off, it's different because the relative willingness of the Romulan Star Empire at the start of 2375 to invade and occupy Bajor is different from that of the Dominion to do the same at the end of 2373. At the start of the war, Dominion forces haven't taken any major losses and they haven't lost major territory. They've already sent a fleet into the Bajor System; diverting some of them to occupy Bajor itself would be not a huge logistical challenge.
That they did not do so is a function of the Dominion's day-to-day governing class (presumably Weyoun and his fellow Vorta administrators) deciding that the propaganda benefits of being able to portray themselves as the benevolent good guys and the Federation/Klingon Alliance as the aggressors, outweighed the potential benefits of occupying Bajor directly. So from a Bajoran perspective, the Dominion has almost all the military leverage, and the only way to avoid an invasion is to appeal to the Dominion's interests by submitting to its whims.
The Romulans of early 2375, by contrast, have been embroiled in a major war for months that has already cost them significantly. They have to maintain an alliance with the Federation and the Klingon Empire if they hope to win the war with the Dominion, and that means they cannot ultimately afford to take action that will drive the Federation to turn against them. So their attempt to
de facto seize Derna looks like it's part of a plan to slowly insinuate their forces into a permanent position within the Bajor System, attempting to essentially seize the moon without Bajor or the Federation feeling like it's worth a confrontation to take the moon back; I think their hope was that after the war, they could slowly grow their presence in the Bajor System, each time stopping just short of a full-out confrontation, until they ended up with too many forces in the system to be resisted -- like the temperature being gradually turned up until it's boiling, without the frog realizing it.
Kira and the Bajoran government immediately recognized this long-term gamble for what it was. They also immediately recognized that Derna put Romulan forces in a better position to immediately threaten the surface of Bajor than the Dominion forces occupying the station further out in the B'hava'el Star System. And they recognized that the Federation could be pressured into backing up Bajor if the Bajoran Militia re-asserted Bajoran sovereignty over Derna, and that the Romulans could thereby be pressured to stand down.
The bottom line is that in both situations, the Bajorans had to serve the immediate interest of avoiding an attack upon or invasion of their planetary surface. In late 2373, that meant bending the knee to Dominion occupation of the Deep Space 9 station; in early 2375, that meant asserting sovereignty over their moon and pressuring the Federation into backing them up.
