Ironically, this is one of the more realistic aspects of the game. Pillaging does hurt the attacker. Always has. Remember, the "scorched earth" policies of the U.S. Civil War and WWII were used defensively. Russia pillaged her own roads, her own rails, her own cities, and her own farms. This cost the lives of many Russian civilians, who promptly starved to death. However, in many cases, the civilians themselves preferred the possibility of starvation to giving up their lands intact to the German invader. And the effect was devastating to the invaders who couldn't move quickly and had serious supply problems. While you don't get supply problems in CivIII, you certainly do slow down the attackers mobility, and a city is much less valuable until the infrastructure is rebuilt. Is CivIII perfect? Of course not. But it isn't supposed to be a combat simulation, either. Fundamentally, CivIII is a resource management game, and it absolutely excels at that.