Wozu Dichter? What's the point of a poet? Here's the full quotation of that often misused phrase in context.

. . . . . .                 Indessen duenket mir oefters
   Besser zu schlafen, wie so ohne Genossen zu seyn,
So zu harren und was zu thun indess und zu sagen,
   Weiss ich nicht und wozu Dichter in duerftiger Zeit?

Friedrich Hoelderlin (1770-1843). Brod und Wein (Erste Fassung) #7.

Goethe's Tasso is no "Dichter in duerftiger Zeit." He is rather duerftig himself, unbalanced and impulsive in the extreme. In fact, in an annoyed moment, the diplomat Antonio sees him as a useless and pampered brat and undiplomatically says so, triggering a fateful sequence of events that generate a seemingly unstoppable momentum.
The apparent idyllic setting at the court of Ferrara is fragile. It is not a blessing bestowed on the family and supported by good fortune but is a construct of human determination and will, of a superior stoic attitude. All of them, including the absent sister, have and have had their personal afflictions. Their mother's life ended in tragedy. It is only with the greatest of care and mutual respect that the current equilibrium can be maintained. The slightest hostile or even thoughtless act by one against another may destroy everything. Where so much "personal" diplomacy is required the presence of a person like Tasso is a threat.

The historical Tasso (1544-1595) was known even among his contemporaries as a man suffering from depression and paranoia aggravated by hypochondria. His pathology is what attracted Goethe, not his creative genius, let alone the hostility or manipulations of a few at the court. The drama (or is it a tragedy?) portrays the last stages of Tasso's accelerating disintegration. Witness the near obsessive self-destruction of a personality. The bit of court intrigue helps it along but doesn't cause it.

When a French critic called Tasso an amplified Werther, Goethe agreed. Schiller too comments on their similarity in his essay Ueber naive und sentimentalische Dichtung. Yet Tasso survives where Werther does not. His enigmatic final monologue appears to offer a clue or two.

Jacob Burckhardt's Die Cultur der Renaissance in Italien (1860) is still eminently readable.

John Hale, The Civilization of Europe in the Renaissance (1993) is a modern classic.
If you have the time take a look in particular at the chapters "Civility", "Civility in Danger?" and "The Control of Man".
Introducing the first of the three Hale quotes from Freud's The Future of an Illusion: "Civilization has to be defended against the individual, and its regulations, institutions and commands are directed to that task."

Jaques Barzun, From Dawn to Decadence (2000) has a chapter "The View from Weimar Around 1790."

The Durants' The Story of Civilization, vols V and VI (Renaissance & Reformation).