Rome II: Total War behaves this way - the cities of your treaty allies count towards the threshold for victory.
I think it could work well either towards domination or towards Diplomatic.
I've yet to win a Domination victory in VI because it's kind of tedious. Technically you don't have to conquer every city, just the capitals, but in practice it's not often feasible to capture just the capitals. Is it more or less tedious than the Civ3 and Civ4 domination conditions? Probably depends on the map. In those iterations, you can focus on conquering the easier areas to conquer, and in IV you can vassalize as well, but if there are some really inconvenient capitals to capture in VI, too bad, you still have to conquer them.
The macro level problem, IMO, is that in VI (but also III and to a lesser extent IV), the amount of conquering required to achieve domination is so far beyond what is needed to dominate in practice that it's just not interesting near the end. I'd argue that another avenue to make it work better would be if you were required to conquer half the original capitals, or half-plus-one. Much less tedium, and more urgency for the other civs to intervene if someone has conquered three, four, or five capitals.