Well, if the magic was toned down very significantly, I feel dominions would approach Master of Magic, which of course isn't necessarily a bad thing, considering how many years I spent playing that.
On the other hand like you said, the ability to increase gold/resource/supplies and to lower magic sites, and increase research, really does change the game pretty dramatically in the direction you mentioned. (Not to mention what could be done on top of that with mods).
I'm just curious, do you feel like anything else should be done in that regard PvK? Perhaps some broader modding tools?