or do you not care so long as it's a good system?
About the size of it for me. As you had said, both systems have their advantages - whatever you think will suit the NES better... Somehow, however, I think that the second option will work better (having examined firsthand the deficiencies of my own system - though personally probably I wouldn't abandon it. I am planning some modifications and improvements for ITNES even as I type).
Do you have a preference, or do you not care?
Care to specify what "power level" is exactly? If its a sum of economic and military might like I think it is, these things tend to grow increasingly unbalanced as time goes anyway (yet at the same time do occasionally change quite radically).
My opinion on economic sacrifice is easy to guess, I realize that it is somewhat unrealistic (perhaps some checks are in order? Like bigger penalties for confidence and long-run detriment for the economy due to the inherent instability), but agree with your arguments for it.
Are you willing to stomach a few simple formulas in order to get a more realistic system?
Personally I am willing to do so, especially as indeed it isn't hard to get used to such systems (at least, it wasn't hard for me in Stormbringer's NES). I am somewhat more suspicious of some other players, especially those that complained in stSbNES and those that failed to understand the (sometimes confusing, but still comparatively simplistic) NES2 VI rules (nothing personal, ofcourse...).
The EZ system sounds nice (I got killed before I could play around with it in LINES II, so don't have any experience working with it), though potentially hard for the mod to work with. I could also see it influencing the military campaigning in a good way (encouraging invasons of territories near your richer, more densely-populated EZs (where logistical support and reinforcements would be easier to organize) and at the same time making said EZs more defensible).
So in the end I'm probably for it, if you think you're up to the task of managing these.