Being oppressive doesn't remove your legitimacy.

As long as you can hold on to being the government (guns!), you make the laws and are by definition legitimacy itself.

Don't confuse power and legitimacy. This is one of the major reasons why India isn't ruled by the British now. British had power, Gandhi and the peaceful revolutionists had legitimacy... guns can only project so much power.

Guns are the only form of power. Sometimes you just don't have enough guns.

One could argue that money is more powerful than firearms. How much power and influence do corporations wield? I don't see many CEOs packing heat.

They can influence those who do.

Case in point: Gaddafi

You might say that morally it should come from consent, but descriptively, legitimacy comes from having a monopoly on force and not being totally, utterly hated.