There are certain people who do not need to serve as a ruler over a people. We might think that it is a good thing for the "everyman" to rise to power, but if the "everyman" that does this is a fool - it will end badly.
The fool who begins to enjoy luxury - will wind up being very difficult to live with in the end. He will view his luxury as what is due him - rather than a blessing and a priviledge that has been given to him either by others or through hard work and application of himself to a task. That is why such luxury is not fitting for him. It isn't right for him to have it - because he does not appreciate it. It does more harm to him than good in the end because he will begin to think he deserves it - everyone owes him what is necessary to live a life of luxury.
I'm going to take the risk of offending some at this point in this proverb. This passage illustrates why a welfare state is harmful to a populace. I know there are cries made at this statement that we do not provide a life of luxury to those on welfare. True - their standard of living is not that of kings - but we are fundamentally harming them by not having them work or do something to get it. In order for us to develop properly in a moral sense, we need to work - we need to DO something. When we don't, we do not appreciate what is given to us. Then we begin building a mindset that people owe us something - and that will become toxic in the end. In time we will think they owe us more and more - and gratefulness for what we do have will be all but extinct in our thinking. When that way of thinking grows in our minds - we are quickly descending in wisdom and in any kind of spiritual growth.
Just as luxury is not fitting for a fool - so also is it for a slave to rule over princes. We in America are not used to the whole idea of nobility. We fought an entire war to make sure that we did not have a king who could rule over us without the consent of the governed. But, there is a wisdom to having the wiser in society rule over us. To have a person rule who does not know wisdom - who does not know the matters of state - who does not understand the necessity for good economic policy - and most of all justice - is to invite serious problems in that land. It is also a historical reality that when a slave or a commoner comes into power - the problem is too often that they want revenge for the wrongs they suffered - rather than to govern all the people with wisdom and integrity. I do not support the ascendency of a king in our land - but I do fully support not electing fools to office. It is wisdom to elect the wise to rule over us.