You still don't get it, the power is only in the sellswords hand because he has a sword, he can determine life and death, his power is absolute. The other 3 can only hope to persuade/deceive him into giving his power to them. But this does not work if the other 3 also have power of life and death on their own without him. If the King has dragons he does not need popular support he can rule by destruction and fear. He doesn't need the support of the people if he has them cowed through fear.
Varys' riddle presumes that only the sellsword has power, and that is true in a world without magic, it is decidedly not true in a world with magic.
Ruling through destruction and fear is just another way of saying 'making the people think he's the one with the power'. Just like abusing the shadow babies for whatever purpose they're meant to fulfill.
Right now the one getting ahead seems to be Renly, I think he has the largest following. As the things stand now, if he allied himself with Robb they could easily win the war. But if others manage their resources wisely, they can still shift people's perceptions.
Varys' riddle is actually very accurate and if anything, it's just a bit simple - there's absolutely nothing wrong with the fundamentals. Saying 'but the wealthy man has a dagger (magic) and can kill the priest!' is just adding another aspect, nothing changes in the riddle except for what the sellsword (the realm, or the realm's people) has to take into account when making his decision.
This riddle would not be wrong even if there was some kind of a 'weapon' more powerful than
everyone's support - it would only mean the 'sellsword' sees the person with the 'weapon' as the one with power. As soon as someone else comes up with compelling evidenceo of how they can neutralize the 'weapon', good luck staying in charge.