I agree, the SOD is dead and that is how it is fine! I hated the SOD in CIV4, especially with the ranged units it would be stupid. 1upt is good and realistic, but the AI needs improving. It worked fine in Panzer General 1, why can't they do it today?
I can't remember exactly where or when, but someone explained it to me that the main difference is that in Panzer General, there was a hard cap on the total number of units you could have. I do not think this is a better system for Civ, but it did make sense to explain the differences.