Mo' money, mo' problems. I suppose no one would ever be jealous, threatened, or spiteful toward the wizard that is enthralling this town (probably with some sort of charm spell).
Why would you need a charm spell? You're the hometown boy (or girl) made good. You're the one who went on to fame and glory. You don't need magic to get people to suck up to you.
But regardless--yes, undoubtedly someone will feel jealous, threatened, and spiteful. So what? You've got bodyguards. Lots of people feel that you're the best thing since sliced bread... because if anything happens to you, the wizard-king, your town does not become free to make its own fate. It just gets overrun by the wizard-king from the next town over. Like I said, better to be ruled by one of your own than subjugated by a conqueror.
In a world where the quadratic wizard can exist, all it takes is one high-level wizard to establish that no kingdom can afford to not have one. In such a world, the threat to lowbie wizards does not come from peasant mobs. It comes from high-level wizards who take a dim view of competition. The end result of the quadratic wizard is not Dragon Age; it's Dark Sun.