The rationale for the Theisman Buildup
The Theisman logic is very much along the lines Joel laid out. From his perspective, however, the really critical point is that as Secretary of War it is his responsibility to build the most effective military he can. His job is to defend the Republic of Haven which, at the moment, has the disadvantage that several of its star systems are under occupation by a foreign power -- the SKM. He doesn't want to go back to war with Manticore; he simply can't rule out the possibility that he'll have no choice. If it does happen, he has two huge responsibilities: (1) His responsibility to his country, which is to win; and (2) His responsibility to his military personnel, which is to refuse to send them out in deathtrap which can't even fight back.
Accordingly, his only real choice was to take over and maintain Bolthole. Now, while it isn't specified at any point in this novel, in actual fact Pierre and St-Just saw Bolthole primarily as simply a huge shipbuilding complex no one else would know about and which would thus be safe from counter attack (think the Russian moving the tank factories to the other side of the Ural Mts. so the Germans couldn't reach them). They weren't averse to doing a certain amount of bootstrap-style R&D there, but by and large they were committed to buying off-the-shelf Solly technology clandestinely (to evade the embargo) rather than growing their own tech base. This was largely because they were still dealing with getting beyond the "Monkey-see, Monkey-do" school of shipbuilding. It was Theisman, once he discovered Bolthole's existence and Operation Buttercup brought him face to face with just how enormous the tech gap between the PRH and the SKM had become, who saw the need to turn it into a major R&D node, as well. His ability to see the need for this also reflects that fact that, unlike Pierre and St-Just, he actually has a large pool of skilled shipbuilders (who were trained under Pierre and St-Just) who can do the building while someone else does the R&D. He's gotten the building time for SDs down to a tad under 2 years (which is still longer than the SKM takes), and Shannon took about a year or so to get the basic elements of "My Answer to Manticoran Tech Superiority" formulated and in place, so since we're about 3 years down the road from when he began the project, you can imagine what's happening to the RH's warship inventory.
Please note, however, that from the beginning, Theisman has done his best to understate/conceal the Republican Navy's capabilities. He has done this for several reasons. One is to avoid drawing the sort of preemptive attack he's discussed with Pritchart. Another one, however, is the fact that if he is forced to go to war again, he wants to have at least a few surprises still in his locker -- especially since he's still going to be playing catch-up with Manty technology. So one may assume that even after the Manties begin to learn about what's going on at Bolthole, he will do his best to keep them from learning everything. Now, if Pat Givens were still running ONI, he probably wouldn't succeed. As things are, though, weeeeeeel
As far as the embargo is concerned, the only thing it ever covered was technology and weapons transfers. Since the war isn't officially over, the embargo remains in effect (another point for Pritchart to be upset over, given the RH's need to continue the rebuilding of its economy), but it's much more porous than it was, at least in non-war-fighting areas. Of course, with the proper end-user certification, that super-computer has nothing to do with fighting a war, now does it?
The Solarian League is still pretty much ignoring events out in the SKM's neck of the universe. Both the SK and the RH are definitely considered "minor powers" (after all, the SLN thinks that everyone else is a "minor power") and while a certain degree of interest is beginning to percolate through the more evolution-oriented members of the SLN, those thinking that way are definitely still in the minority. The theory at the moment (such as it is and what there is of it) is that the ability of these minor nations to beat up on one another is all very well, but not what you'd expect to work against a real interstellar power. Or perhaps a better example would be the Europeans who, faced with what the Japanese did to the Russians in the Russo-Japanese War, more or less shrugged it off by saying "Well, Russia is really pretty much an Asiatic power itself, so what else could you expect? It wasn't like the plucky little Nips defeated white men, after all." As a result, very little effort is being made by anyone in the SL to systematically investigate what's happening out there on the Korean Pennins-- er, I mean in the Haven Sector.
When you reflect that at the start of WW II, the USN, which had identified Japan as its most probable naval enemy from the time of Teddy Roosevelt on, didn't know about the Long Lance torpedo, the Yamato-class battleships, the 18" gun, the top speeds of at least two classes of IJN battleships, the quality of Japanese night-vision optics, etc., and paid absolutely no attention to information it did have from other sources (like the dogfighting quality and radius of the Zero and the range of the Betty), you may begin to see what the SLN's attitude towards the RMN and RHN is. Until someone actually uses those weapons on them, they're going to regard them as no big thing.
For anyone who finds it difficult to suspend disbelief and accept that this could be their attitude, I can only say that the ability of an entrenched, bureaucratic military to ignore anything which challenges its fundamental working assumptions simply cannot be exaggerated.