You wouldn't have any income either.
We would have an income. Who cares if every region you control is at 60-70% production due to no estate coverage? If you have 142% more regions than you would otherwise, you break even, and more than that you make a profit.
Not to mention you deny the lands to your opponents.
Think about this, as Duke of a city, would I rather have 4 knights, and ensure 100% production in my region, or have my duchy larger by 4 more regions, as each of those potential knights takes over a region and then pays me a portion of their taxes from their regions. Some will choose one way, others will choose another, but I can't wait for the changes.
Any chance they'll be done before 2012?