Happily, you're playing 4th ed. Having a pet kingdom, like a pet dragon, means that you can adventure in new, and awesome places. It, however, doesn't impact actual encounters.
A kingdom is a great source for treasure parcels, but the economics of 4th ed aren't. Soldiers are great set dressing, but as low-level minions in (what is likely at least paragon) have no relevance to a fight.
To be specific, in paragon, PCs are expected to have strongholds (only 25k gold) and generally have the plot center around continent- and world-level threats. In epic, the game effectively assumes the PCs have "won the world." and presents planar level threats. Given that the cost of an epic healing potion is the cost of a large city, these scales are not unreasonable.
To address your edit, Being a human king in the abyss is quite literally being nothing but a target. Thank your player for the wonderful source of plot, and base most of the next few levels over encounters in the town.
Keeping him in check is the wrong question. His non-encounter antics are a fantastic source of plot, intrigue, and personalities. The party's combat encounters should be appropriate to their level and themed in response to their actions. Playing "king of the hill" for a few levels in late paragon or early epic in the abyss is actually the perfect spot for the narrative. Demons come in all flavours, and demons at the PCs level are going to be rare indeed. The effectiveness of an "army" in 4th ed is purely and manifestly set-dressing. There is no way to model them in combat. (If your player insists, give him 20 odd minions scaled to appropriate low-paragon level and tell him to roll his heart out.)
In the D&D game I played in, we used the realm-management rules from REIGN to model the development of our kingdom-city. They fit fairly well, until the levels got so high that we were giving insane bonuses to ourselves with the spare change from rituals.
Embrace the kingdom-as-plot! Now you have something to narratively threaten and to get the player invested in the story in its growth. You have a new source of treasure, so that all mobs don't have to be living in level-appropriate treasure-bedecked lairs. Item rarity means that they can buy all the common items they want. By the time they get to epic, this is already the case.
In 4th edition, as there is no aspect of simulation in the system, the kingdom is merely a very interesting narrative element to work into the plot.