Your anology doesn't apply here. The fact is that Freeside is right next to the Strip. House sees a partnership between the NCR, who he is trying to drive out, and the Kings. It's logical that he is not going to act favourably towards the Kings.
As for the legality of his dominion, this doesn't really matter in a post-apocalyptic environment. In what way is NCR's constant expansion legal, in what way is the Legion's way of total war legal? Might is right in the wastes. House has a huge and powerful robot army, its that simple.
And neither does yours, because he dosen't get the Securitron Army until after the Courier activates them towards the end of the game, which means that your argument for wiping out the Kings dosen't make sense. He dosen't assert any real control both legal or real over Freeside unless he wins at the end, so you can't really say "the NCR was encroaching on his turf " because
it wasn't his to begin with. The whole reason Freeside exists is because House wanted to keep the "commoners" out of his gated community. When you leave people to fend for themselves, you really shouldn't be surprised when they take their fate in their own hands.
Plus, in his ending, the NCR completely withdraws from the Mojave region, thus making any worries about the "NCR influence in Freeside" bogeyman that House supporters like to roll out is laughable to say the least. Yeah, of course they're going to be a little mad that House kicked out the people trying to help them, but if the worst case scenario to come from this is that House
actually has to provide for the people he now rules over, then boo [censored] hoo. Sovereignty comes with responsiblities, it's a complete package, you can't just pick and choose what you want.