I agree with comments that the strict town building placement leads to very similar town layouts every game. You often only have 1 reasonable spot to put a new town (sure I could put a blue town right next to that red town with 5 seige workshops, but why would I do that...) and that just leads to very boring town placement.
The distance does become an issue, especially if you use the god power to clear the board. Late game, you get probably 10-15 moves before any units even get near each other once the closer towns are destroyed. Especially for melee units, and more so for Trojan Horses.
I'm sure this is something that is not an issue for some people, but it is an issue for others, depending on play style.