Good post, Indirik. I agree on everything except your 4-th point.
Dwilight map is not ideal either.
BT could be pretty much fixed if you moved southern peninsula up and connected it to the mainland.
Dwilight, on the other hand, being two sausages divided by seas, won't work too well unless it has a really huge number of players.
Rio is just part of why the BT map is broken. The blight taking such a high ratio of cities is another. Many realms have poor capital choices, and the opportunities to make new viable realms is limited.
Turning down the character limit would probably just break the game completely.
Over simplistic scenario to illustrate:
Player A, B, and C all have characters in realms X, Y, Z. Player A's favorite realm in X, B's favorite realm is Y, and C's favorite realm is Z. All realms currently have 1 character who is the player's "main", and 2 characters which are mostly dummies that just follow orders. New restriction comes in place and imposes a 1 character per player rule. Player A deletes his characters in X and Y, B in X and Z, and C in Y and Z. Realms X, Y, and Z find themselves with no more dummies to manage the regions and launch military campaigns, players A, B, and C no longer enjoy their favorite realm.
Players like Indirik don't get to hog so many high titles with dummy characters because of shennenigans they do, but because there simply isn't much competition for these titles. Anyone and everyone gets a title nowadays.
As for the solution of removing islands... that strategy has been done again and again. Glaciers moved in to many continents, monsters into Dwi, blight into BT. In which case did removing land correct the problem it was meant to fix? It always seems to just create very short-term gain, quickly compensated by the loss of many targeted players. You know what they say about repeating the same action and expecting different results...
I think that anything decided unilaterally from the top-down is bound to fail. Players who get their realm picked off by dev action are often resentful of them, and often quit. I also think that any half-measure, such as closing some continents but not others, is bound to fail as well. There'll be accusations of favoritism and a lot of jealousy, unless you quite simply get rid of *all* continents to reboot a new one, either with a pre-existing map or a new one. I can't really think of a good candidate map, though, ideally it'd be something like SI, but with more cities. Colonies, maybe? Peninsula on BT/AT is bad, and EC/FEI/Dwi are too linear. Perhaps taking pre-glacier AC and just scrapping the peninsula.