This is a good way to:
1) Increase player density by loss of regions to rogues
2) Shake up political structures, for example, the loss of large swathes of land will lead to realms falling and new ones rising. This was another issue which has been mentioned a lot (probably more) lately.
I suggest we test this on one or two islands first, as the effectivity is yet to be seen. I think it'd be interesting to severely rack up monster/undead spawns, and after a certain period of time (when entire areas are in rogue hands), lower it again. This would create a 'reconquista' effect which people seemed to like about Dwilight.