>Time and time again in the history of the region a king, pharaoh, or other despot would make examples of rebels, put down rebels, and march armies up and down the region to ensure fealty and assign minor lords to protect a region. They could have found the smelters and destroyed them or seized them, those working on it could have been killed.

And when all those rebellions cost the Pharaoh 3x what they used to to put down you're forced to be a lot more diplomatic. Less extraction under threat of violence means smaller army means worse negotiating position for the next one. It's a cycle.

And for every full scale armies meeting in the field type rebellion there's a lot of "sir a second village has lynched the tax men" which compel you to dispense policing forces, etc, etc.

Just because you "can" do something in moderation doesn't mean it's a sustainable way to run your empire at scale.

You can't "just regulate the smiths" like some 21st century despot because those smiths also make the iron tools those people need to farm to pay your taxes. And you can't just "supervise" them with your loyal people because this is pre-industrial and there do not exist sufficient surpluses to feed those nonproductive mouths.