Wow, I've probably written loads on this topic before, but of course being so long removed from Eve (and the RP forums associated with it), I can't bring you links. The thread does seem to tread on old ground and I would've thought any discussion of the Syndicate would have moved past it. I guess the knowledge of the area has lapsed.
But yes, the Federation treaty with the exiles dictated they can't colonize the worlds (probably so they couldn't in time become a competing faction). So, they built space stations, in effect becoming the first spacers building and living out of outposts, laying the trail for 0.0 alliances to follow.
Opinions about them among the Federals and the Federal Intaki may vary, but the fact is that parts of the Federation needs this shadow zone on their border.
Souro Foiritain had his links to the Syndicate and undoubtedly other politicians do the same: when you need to buy illegal goods, you go to the Syndicate. On the other hand, when you need to sell them, you do the same which provides the link to shady Federal corporations. In the same vein... can you say spring break down in Mexico? Oh bet you can.
So yeah, you can sorta snub your nose at it, but it is there and people like to use its services. Of course, some politicians like the militant competitor of Souro Foiritain for one, named Mentas Blaque? It's been years... Anyway, some of them make it their policy/platform to oppose the illegalities of the Syndicate. Easy villains for that sort of thing.
It's also always been my contention that the Syndicate is necessary to the Placid region. The smugglers bring in needed goods (which avoid Federal taxation, bringing prices down), as well as drugs, porn, etc. They provide a non-Federal marketplace to Placid products as well. The cultural links between the Placid-born and the Syndicate residents are strained, but it is not always/necessarily antagonistic! Some may think that Federal policies have made the exiles into criminals, who have simply embraced their fate and made the most out of it. The smugglers provide a really cool and interesting way of cultural traffic between the Federal and exiled Intaki. They also polarize Intaki culture itself and the question emerges: which is the truer expression of Intaki culture, the exiles or the Federals?
Anyway, I just scraped the surface here and searching this forum and/or Chatsubo will bring up old threads where me and bunches of other people have written a lot on this topic.