"Here be Sea-Serpentes"...? I just assumed that you'd created that sock-puppet shape intentionally, while playing around for aesthetic effect.

I thought you'd played Civ1, though? If not, it has only 2 victory-conditions: total conquest, or space-race, and my impression was that (just as in Civ3) the space-race was intended as the canonical 'good' ending, in that it's the one that rewards the player with a victory-animation, as opposed to a simple filled wall of trophy-leaderheads.
But space-races by definition take (a lot) longer to play through. This was especially true for Civ1, where (due to software/coding limitations) the player didn't always get to choose his preferred next-tech-to-research/buy,
and tech-costs simply scaled by number of techs known. This meant that a player might have to waste beakers/turns/gold on researching/buying a 'useless' tech first, just to make the 'desired' tech visible -- but also more expensive. For longer games, it's therefore helpful to keep multiple (developed) civs on the map for as long as possible, to act as e.g. research-partners (and/or military allies, if attacked). So I
speculate 
that AI-respawning was put into Civ1 precisely to make full-length space-race games easier/ shorter, by preventing the AI-Civs (or the Barbarians) from wiping each other out too early.
Conversely, as you say, respawning makes conquest-type games incredibly annoying for people trying to win as fast as possible. e.g. On the Civ1 Earthmap, killed civs frequently respawned in South America or Australia, a long way from anyone's default starting-points. This effectively turns 'simple' conquest-games into long, tedious slug-fests, since the player is then 'forced' to colonise the entire world so as to leave no respawn-space available (and/or be familiar enough with the game that he can predict
exactly where the AI-civs will respawn, and then herd those respawned Settlers into Mountainous terrain; see relatively recent
thread in the Civ1 forum titled 'Checkmate' from CFC-user
@Posidonius ).
In Civ3, with its multiple victory-conditions, and variable map-sizes (Civ1 only had variable landmass-size, mapsize was fixed), the same arguments apply, but to an even greater extent on larger maps: hence (I speculate

) Firaxis simply decided to keep respawn, but make it toggle-able: for quick and dirty kill-'em-all games, especially on larger maps, the player can switch it off, for longer/ more challenging games, he can switch it on.