I’ll keep this short as it’s 6am.
The players who create the most activity, roleplay, etc are not the PvP goons and nation leadership who jump around the square. Removing nations by way of war, does not align to slice of life roleplayers and they do leave in droves when these things happen, have happened in the past. It also makes wars extremely toxic, especially when the war for example is rooted within race.
I would agree with you that it stagnates roleplay, there is no progression without consequential war. This was always my case when me and @Telanir discussed this topic, but in reality - this is the kicker - the slice of life roleplayers vote, pay the bills, and create a roleplay atmosphere. You remove them from the equation due to toxic clicking wars, you can see why we are where we are now.
I may not like it, but I definitely understand it.