I am more shocked at the schizophrenia.
Republic Guy I: "Hey, let's get rid of these perfectly good Star Destroyers and Alliance ships that have legitimate military uses for our defense forces or the defense forces of our member worlds."
Republic Guy II: "Great idea, good friend! But keep the mindflayer device. We just use the low settings, everyone will agree to not abuse that or accidentally set it on a higher setting. We also don't generally need to supervise mind-altering intrusions in people, either, though we could have spectators in the control room device for emotional support of the patient."
Republic Guy I: "Perfectly fine idea. We should get right on it!"
It was world-building, and some of it was nice, but some of it just seems ... unbelievable.
And to be fair - the Empire also dismantled all the Seperartist and Imperial ships for no real apparant reason. Sure, the ISD was superior to the Venator, but 95 % of the stuff the Empire used an ISD for cold be done by a Venator, I'd say it would be cheaper to keep them and just roll out the ISDs a little more slowly.