What they should have is that in the industrial age and later, cities should be expected to grow to the 30s and 40s in size. In that case, then you can make a sewer give, say, 10 housing. Or maybe a factory gives like 10 production to all cities within the area. If you do it that way, then you basically have no choice but to "industrialize" or else you'll be left far behind. You'd have to rebalance things - you're going to start running out of citizen slots at some point if your cities are size 40, as well as amenities too, but maybe that's where the other stuff mentioned here makes sense. You'd probably need to bring in corporations to spread and create more amenities, and maybe have to bring in some new ways to use citizens on the map to actually make it worthwhile to grow your cities that big.
A size 40 city requires 20 amenities.
The amenities provided by luxuries are limited, e.g. on a map with 24 different luxuries, an empire in general can get 24 x 4 = 96 amenities from luxuries, independant of the empire size (10 cities or 100 cities or 1000 cities.) If you have 30 civs with enough luxuries, this would result in 24 x 4 x 30 = 2.880 amenities for the map, but a single empire would be capped at 96.
So in a game with 100 or more cities, the amenities from luxuries have an effect of about 1 amenity per city, which is equal to some civic cards. To allow empire wide big cities, there need to be more sources of amenities, e.g. the production of cheap consumer goods to keep the population happy.
Industrial Revolution started with a number of developments :
- Agrarian Revolution provided more food and allowed a larger part of the workforce to switch from farming to producing goods, moving from the land into the cities.
- Steam engine allowed to power machines independent from water (watermill), wind (windmill) or human/animal power (upkeep, food).
- Steam engine allowed RailRoads to transport large quantities of goods independent from waterways on ocean, river or canal to every place on land connected by railroad.
- Improvement of Production Process and machine tools improved output per worker often by a factor of several 100s, so reducing the prices for manufactured goods and allowing more people to buy those goods (mass market).
The availability of all kinds of food and consumer goods for a relative low price in an industrialized society should count as amenities as well as a source of income.
In Civ 6 I would change factories to allow different modes :
- factory for consumer goods : produces amenities and gold income (market) for several cities in 6-9 tiles radius. There might be different types of consumer goods so that more than 1 city builds a factory. The effects should be cummulative, so that different cities can produce different kinds of consumer goods and have a cummulative effect, maybe resulting in +5 amenities from all factories nearby.
- factory for military equipment : +100% production for military units in that city.
Each factory should be allowed to switch between these modes, e.g. switch from consumer good 1 to consumer good 2 or switch to war production.
To compensate the drop in amenities when switching to war production, there should be a patriotism effect giving maybe +5 amenities, which are reduced over time by war weariness.
Consumer Good Production might be realised as an endless project, giving amenities and gold per turn for the city and cities nearby.