The risk involved will depend on how many opponents with how many cities they have left.Lets look at the consequences of 'selling' your empire: You now have 1 city+ Puppets. You now look like a tasty snack to whoever you sold the cities to. Can you build Utopia before you die? Tune in next time to find out. [/announcer]
So while mechanically, yes it is an exploit, it does come with heavy consequences. If your empire is 99% puppets you don't need to get rid of them anyways as right now they are free culture. And by not buying any SPs your growth potential is greatly diminished so if people want to let them. I've seen amazing results over in the Hall of Fame board that didnt use this trick and beat the pants of anyone who did so...