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In my small gaming group we have thus far played without any diplomacy at all (this is not popular with all the players). However I feel that playing without diplomacy improves the game considerably for the following reasons.

1) Most importantly, diplomacy becomes *the single* most important factor in the game once initial expansion is over. It doesn't really matter how well you manage your empire, or how well your armies fight. It only matters who is allied with who. Effectively, diplomacy becomes the game and the entire game becomes micromanagement overhead.

In a group of people that know each other, I find that once everyone has met up and borders been established, I can pretty much predict the way the entire rest of the game will play out. When you play without diplomacy, you never know what the other players will do.

2) Diplomacy is a force multiplier and exaggerates the differences between strong (or lucky) players and weak players. Without diplomacy, everyone must defend all their borders and distrust all their neighbors. With diplomacy, empires that have treaties can pull forces off their borders to go fight other enemies. Strong empires which have more troops can better afford to defend all their borders but gain more from not having to do it. Similarly this allows harder pushes into research, and generally eliminates "drag" on an empire that can further expose any hidden balance issues.

3) Trading encourages specialization and specialization disrupts game balance. Allowing empires to focus on one particular thing gives them more of an opportunity to exploit any design flaws or imbalances that may be present. Usually games are designed and tested in single player mode where such things are hidden. Also, some races/empires/nations/whatever gain more from specialization than others do. (This isn't as much a problem with DOM2 as with some other games). An extension of this is people forging alliances before the game even starts, and designing their empire to suit.

4) Diplomacy causes hard feelings which can often spill over out of the game, or Last into future games.

5) Some people invariably know each other better than others and have an advantage forging alliances with each other (and have an advantage in predicting how the other person will play). Even if they don't go into the game with this intent, these people have a natural advantage which has nothing to do with how well they play or even how well they conduct diplomacy.

5a) Some people do not have the time, or are located in different time zones, and cannot chat in IRC all day or answer e-mails promptly. These people are disadvantaged.

Frankly, other than the nagging feeling that "I ought to be able to do this," I don't feel that diplomacy adds anything to the game whatsoever. It just creates problems.