By the same token, where are the palaces of the Egyptian pharaohs? Many of their tombs have survived, while the palaces are long gone.
Food and frescoes were put in tombs, likewise such thrones are found in carved subterranean tombs in places around the Mediterranean, and no one suggests the King sat there before death to lay down laws.
The burden of proof rests with those who suggest that the only palaces (or foundations thereof) that we've found, were not meant for the living. I'm unconvinced; for me, a cigar is usually just a cigar.
It'd be nice to hear someone has unearthed the tomb of a Cretan monarch, something of a point of reference. While I'm wishing, let him be sleeping with a copy of a Minoan-Egyptian dictionary!