That's how things often work out in real life too.
To further clarify my point, the code is supposed to make all realms go at about 1:3 to 1:2 density, right? But it's not. Some realms have 1:6 density and still get crushed, other realms have about 1:2 and are doing pretty much fine.
If the density code isn't really punishing low density as much as it is punishing poverty... is it not going a little bit beside its intended purpose? Furthermore, if the code's result will be to force realms into only being in the richest cities... are we not going to end up with further isolation of the realms?