You are right! British were wise not to dissolve all the princely states and prefered to rule them only indirectly as they knew that the princes were in much better position to rule them. Even today the royal family of Kolhapur commands respect among the local population and the elected members stand nowhere as regards their charm and charisma. Congress should have continued the British policy of controlling the princely states only indirectly rather than forcibly pulling them in the Indian unioin.