Altering the game mechanics in no way punishes people. As I clearly stated in my preamble we need to reconsider (in my opinion) the effects of looting on realm control. People can still damage the regions production, make morale go way down, damage recruitment centers etc. But it should in my opinion have a lowered effect on realm control. Looking at a map and seeing huge boarder regions that are just rogue rubs me the wrong way.
The 'power' game reasons for wanting it to stay the same are pretty obvious. It allows you to quickly do lasting damage that is cumulative over time. This isn't true of abandoned take over attempts. So from a military standpoint yes, deny your enemy the use of their lands. But that type of warfare isn't something that really fits BM's frame of reference. Looting in the medieval world by and large did not effect political control such that regions would just declare they had no lords.
Your arguments are sound.
I wouldn't mind looting having less effect on control, as long as their damage is longer-lasting.
I actually quite like the idea of a large realm having all of its regions at 0% production without everything revolting.
