That's a very interesting perspective, and it makes sense. It also means that approaching slavery on the strategic level would be far harder, and might require at least some meddling, genophage style.
It also explains quite neatly how Batarian Hegemony fallen to indoctrination so easily.
Maybe. We'll have a really,
really hard time preventing Batarians from enslaving other Batarians, but we may be able to prevent Batarians from enslaving non-Batarians. Interestingly, the idea that Batarians instinctively draw a sharp contrast between Batarian and non-Batarian (as opposed to the human habit of anthropomorphizing even inanimate objects) might help us here, if we can persuade the Hegemony to adopt the view that slavery is fine for Batarians, but not for non-Batarians. It's a delicate situation, though, especially since many members of non-Batarian races will be less appreciative of the distinction and may be inclined to see any actual endorsement of such a policy as being pro-slavery.
These two statements contradict each other.
Not really. While it would be very hard, though perhaps not impossible, for external economic sanctions alone to provoke an internal revolt, Batarians are still sapient beings, and thus will be capable of going against their natural inclinations. A possibly-useful mental shorthand here would be to consider Batarians to be like xenophobic house elves, of Harry Potter theme: as a race they actually enjoy being servile to those they see as "one of them", but if conditions become truly horrible you might create a Dobby, or even a whole group of Dobby-s.
There's a saying that every society is two skipped meals away from revolution; with Batarians that saying might morph to four or five skipped meals, but the sentiment will still be there, eventually. The terrible fact is that once a revolution does begin among Batarians it would almost certainly prove to be far, far more vicious than even extremely bloody instances on Earth like the French Revolution. Relations between castes would become so bad that the castes would schism: each side of the conflict would see the enemy as foreign invaders rather than members of the herd, and thus be inclined to be extremely vicious to them.
The point is that such a Batarian civil war would be vicious and terrible, laying waste to cities, maybe whole continents or planets, and produce a massive number of refugees, refugees that off-world aid organizations would have to evacuate off of Khar'shan and all the Batarian-owned worlds and flood the galaxy. It'd be a nightmare: the Quarians are considered a menace with "only" 17 million of them in their Migrant Fleet, whereas there are up to 15
billion combative, hostile Batarians on Khar'shan alone, not including the Hegemony's other colony worlds.