More cities needs to win. If it doesn't you bork incentives. However I agree it could be tuned. Right now the difference between a 7 pop city and a 20+ pop city is arguably too small. That's a side effect of the district gameplay setup + limits on tiles/city center multipliers. Coming up with amenities for huge empires can be challenging so that's where you'd get your tradeoff; if big cities are scaled to be more effective by a larger amount, you'd have some diminishing marginal utility in going wider w/o the ability to grow, without necessarily tanking in doing so or kneecapping yourself through war success.