[Edi]

It depends heavily on which nation you use that against. Some nations are heavily capital restricted in terms of commanders and units that they just absolutely need, so if you shut down their capital, they will simply be out of their main combat mages and other best units.

EA T'ien Ch'i for example can recruit Celestial Masters and Masters of Five Elements from their capital. All the other mages they have are Masters of the Way and Masters of the Dead. That's a pretty crippling disadvantage. There are other nations with similar problems.

On the other hand, something like Jomon or Shinuyama or Marverni couldn't care less if one castle or even the capital is shut down, because they can recruit everything that counts from everywhere.