I think it means that Beth realized Dawn had no power, and was as scared as everyone else. Dawn was merely the ruler of a small kingdom, a kingdom that was fragile. She depended on, and exploited, fear to remain as its leader. She probably killed (Hanson?), the former king to assume the top spot, and she merely had to watch her back for the next up-and-comer to try to assume her spot. Like all unsure, incompetant rulers, she depended on gifts and favors to her closest to appear benevolent and powerful. I don't think "Keep your friends close, but your enemies closer" was ever stated in episodes about the hospital, but the ambiance is one of deliberate fear.