While Worf's rank in the Federation was not considered low, it is definitely low compared to becoming a key political leader in the Klingon empire. Yet, he passed up opportunities to be "CEO" in the Klingon empire in exchange for being a "manager" in the Federation. Where is the honour in doing that? Furthermore, isn't there more honour in serving your own people in a top position than foreigners in a far lower position? In fact, one may even argue he brought "dishonour" to his family for not rising up to the occasion. This is illogical in the context of the Klingon culture. Why did Worf make this "dishonourable" decision?
For a start, Worf is not a 'typical' Klingon warrior. He doesn't have a need for great power, as other Klingon warriors seem to. His honour is more pure than other Klingon warriors too. Maybe growing up in a human colony affected him, maybe not. Not all Klingons are power-hungry warriors, as stated by Hoshi Sato in ST:E, the Klingon cultures are as varied as earth's.
Personally, I think it's because Worf sees the Klingon high council as largely dishonourable from his endeavors. He also had a lot of problems with the Empire, so I think he wouldn't feel at home there.
However, later on, he does become a high-ranking member of the Empire, I don't remember the rank but it's in TNG finale(future scene).
Worf refused the highest position in the empire for the same reason that he accepted discommodation for his father's alleged crime. He honestly believed that it was in the best interest of the empire. General Martok had far more experience in a high leadership role and Worf knew from personal experience that Martok's honesty, courage, honor and ability were of the highest caliber. Worf had modeled himself on the Klingon version of Sir Galahad, an idealized perfect warrior. Such a man will always make the unselfish choice.