Well, thats the point-I think-to linking corruption to the new Health concept. As it stands in Civ3, if your city is MILES from the Capital, then it suffers MAJOR corruption-causing it to produce almost NO shields and NO commerce (thus making it pointless).
Now, though, if you have a city which suffers from distance corruption-it just means that it will suffer from lower health-which will impact on population growth and happiness (think The Lawless Frontier towns of the Wild West), whilst leaving your shields and commerce levels relatively-or completely-untouched. This means that a smart player can attempt to do what is neccessary to boost the health of these cities-via the building of improvements, or shipping of food, or changes to civics settings.
Of course, if low health effected STABILITY as well (i.e. chance of secession), then so much the BETTER!!!
Yours,
Aussie_Lurker.