Maybe the reason for no longer being able to destroy a city is to prevent an all-too-easy strategy of burning down a city when facing certain defeat. I could see doing this if I had no way of reinforcing a city and was left with too few surviving units to defend it after a battle. No doubt, I would definitely lose that city on the very next turn. In this case (and provided I had no chance of retaking it anytime soon) I would choose to destroy it rather than leaving it to an invader. That's pretty cheap and frustrating to a live player (imagine if the AI did that!)