Don't know to me this is common sense. Nobility traded up in titles, generally trying to keep what they had in the process but upward movement in titles and or holdings was obviously a desired thing. Taking on titles and dumping them without holding to that noble mentality, well it might not be "hurting" anyone but it sure doesn't seem like it is doing great things for the intended atmosphere.
The worse thing about SMA was not that it existed or that it tricked onto other continents. The worse thing is it gave people the idea that the other continents didn't have a medieval atmosphere that was also expected to be maintained.
You are forgetting the fact the game doesn't allow you to hold on to multiple holdings. If this game allowed people to hold multiple lordships, I doubt people would be 'dumping' their titles as you put them.
