I'd actually love to see more diversity in what consists of a "successful" endgame civ. So if there was a change out there that left more viable opponents "in the game", closer to the end, I'd support it. I haven't seen a suggestion in this thread, though, that would reasonably accomplish this. I think the proposals so far would allow already-successful civs to be even more dominant. From my experience, the cap requires more sacrifice/compromise in critical military decision-making, and encourages diplomacy and anticipation -- all better, smarter gameplay imo. Raise the cap significantly, though, and these pressures go away as unit spam becomes the answer to every problem -- the game is easier but less fun. I think thats what everyone is worried about here.
From your description it strikes me that there already IS support for this playstyle, and that maybe you just failed the implement it successfully in your current game? The difficulty levels up to immortal are so subtly different, I find it difficult to imagine that dropping down just one level wouldn't have the effect you're looking for; can you confirm you've tested this?
All that said, I think there ARE some features that are currently broken in VP: for example the "complete kills" checkbox serves only to confuse the AI, and does not add any interesting or worthwhile change to the game outside of MP. I'll try a OCC run at some point soon.