There are a lot of fandoms where I'd be okay with a handwave, but especially when they're already getting into D/s dynamics I think it's really important that Peter keep the imbalance at the forefront of everyone's minds. Plus it's just good Domming.

I think what makes Peter such an appealing Dom is precisely that he knows how much power he has over Neal and he's disciplined and controlled enough never to misuse it -- he sometimes teases Neal about sending him back to prison, but when actually pushed to the wall, even when he's mightily pissed off at Neal, he will fight for every right Neal has, every single time. I think it could easily be an abuse of his power to seduce Neal (or allow himself to be seduced by Neal), but Peter is one of the few characters who has the discipline to keep above that.