But that isn't how it worked in real life, either. Can you name any equivalent of OPM countries that just merrily ate other small countries without resistance from bigger powers in the 1400-1600 time period? Not just once, mind, which you can easily do in DW with luck (many, arguably most, wars do not end up with cascading alliances), but several times over?
No, but those countries often had other ways of coming to power. In EU3, we really don't. Most of the systems revolve around conquest and having something force you to not be able to exert any influence via combat in your region (such as worries over being insta-vassalised) means that you have a lot of trouble playing the game.
Nevermind the fact that most of those countries had one major power in the region that decided to screw them over, instead of half of Europe declaring war on them. The system as it is is in no way realistic. When I'm playing as the Mamluks and I declare war on a nation near me, I don't expect an alliance chain that eventually goes to MING to spark up because that's just stupid. Even worse since Ming can actually often join in this war due to the lack of FoW on the AI.
If systems similar to CK's were implemented (CK's diplomacy system is a lot more advanced than EU3's, despite being set in an earlier time period), then I would be fine with the current implementation
As a small country, you are a pawn in the world's power struggles. It used to be any OPM could easily become a medium power in a decade or two by opportunistic wars against foes with no allies or only allies that couldn't effectively help them, but this was completely unrealistic.
I'm not denying that, but I think the current system is equally or more realistic. I discussed this with some guys about the Total War games, too. Minor powers near a minor power that's rising to power should unite together in an attempt to stop him. I have NO trouble with this. What I have a trouble with is when the AI has no decision making and is, instead, hard programmed to join alliances against the player (as far as I can tell).
The AI wasn't really an issue in HttT, but with the new features in DW, it certainly is.
The difference as I see it is that now, as an OPM, you are effectively constrained to either expand as a real OPM would (by building up allies and your own economic power until the perfect situation for you to take a healthy chunk of land in someone else's war comes along) or you have to, if you want to do it the old way, gamble on an incredibly risky opportunistic war that will only work if nobody bothers to step in to squash you, which has a good chance of ending in you being annexed. I like this and find it realistic to what an OPM's situation should be - you will NOT be a major power by 1450 barring near-divine levels of luck, but you can pretty reliably become one in a couple of centuries if you make sure you've always got someone big and tough at your back and pick safe expansion opportunities (or non-war related ones - PUs and spies don't get you hit by any alliances). The realism of that is easily worth the occasional Spanish baltic territory (which isn't even that unrealistic, as has been argued before... and more to the point, stuff like that happened in HTTT as well) to me. To you, it isn't, and that's fine - but it doesn't mean you "can't REALLY" play as a OPM. It means you can't play them anything like you could in HTTT, and you can't play them like you can play a larger power.
It rarely, or almost never, turns out like this. The only allies you can really cultivate are the ones far away since you'd need to do a land grab of a province close to yours, and so it's fairly rare for them to actually intervene.
This game is less realistic now than it was in HttT. As I said above, the current systems need a more advanced decision making process for the AI or we get silly gangbangs.
The glorious history of the Roman Empire 1399-1453 includes exactly one successful conquest (versus Achaea) and not a whole lot else, leading to an ignonimous stripping of what territories they'd gained by the Ottomans and then annexation. Not to put too fine a point on it, by why should they be easy to play? They're already one of the easiest countries in the game to mega-blob once they do get rolling due to their ridiculously ahistorical and overpowered (but fun!) cores and missions, and in HTTT it was trivial for an experienced player to have them ruling Anataolia and the Balkans like they'd never left in twenty years or less.
I have no trouble with the Ottomans finally deciding they have trouble with the Byzantine Empire and trying to smash it down, especially if it comes in a realistic timeframe (about 1450). The current system, instead, leads to the Byzantine Empire declaring war on other Orthodox Greeks and having an Italian Catholic country declare war on them because it's hard programmed to work like that.
Again, the decision making process on the part of the AI lets this game down.
Now, I do understand that historicity is not the only factor of concern - just noting that in this case your frustration at your near-hopeless situation is pretty much exactly what the historical situation held for the remnants of the Roman Empire. It's still possible to expand them pretty rapidly, though - people have done it and posted it. It's just no longer possible to do it via the gamey tactic of picking off a few minors who don't have allies/guarantees (though nearly all of them were fixed in the last HTTT patch anyway) and then using this power base to crush the Ottomans via blocking the straits. But that never made any sense anyway, to be honest, and relied on heavy exploitation of the AI's inability to recognise what you were doing, and then on its unwillingness to risk naval battle over the straits (even when they'd probably win and letting you control them was allowing you to crush their empire).
Read above.
I sympathise that you don't find it fun that there isn't an easy, gamey way to expand Byzantium or similar minor powers anymore, and that it isn't easy to mod back so that you can easily do it. I'm not being sarcastic. Everybody plays the game their own way, to their own tastes - and many make use of how easy the game is to mod to do so (I myself, for instance, remove the Build X Manufactory missions from the game due to my finding them tedious and tweak the tech speeds of the non-Latin groups to better match my conception of how advanced they ought to be). I played Byzantium quite a few times in HTTT and I certainly had fun with those gamey tactics too. But I love this new system and wouldn't ever go back to the old one, because it makes playing OPMs an entirely new and different game - and variety of experience is what keeps EUIII fresh. The fact you can no longer just declare war when you smell opportunity because you might easily get annexed makes how to survive and thrive with them wholly different than how to survive and thrive with, say, Hungary. I find that valuable enough to not miss Easy Byzantium - and I now think restoring Byzantium to greatness is an actual accomplishment to be proud of, rather than a bullet-point script to follow. The fact I think it really is far more historically accurate (in general, not always in detail) is merely a bonus to the most important thing: it makes the game more fun.
Again, I don't like easy games. I just don't like games that are genuinely broken. I wish we could see a poll of how many people like cascading alliances versus how many people genuinely don't. Don't limit it to people who only have DW, allow everyone who owns EU3 to reply.
I'd much rather they did something mildly historical (as an example: the Greek minors band together to declare their independence in the face of the Byzantine Empire, making it harder to conquer but STILL being possible, if the Byzantines lose then the Ottomans win through the conquest of the resource drained Greek minors) than the current system of "Cascading alliance happens, everyone dies."
You don't find it fun to play that way, at least not from your games so far (you might change your mind, but I'm not saying you will or even that you should). And unlike my modding tech groups, there's no easy way to mod out the system, which is why I sympathise. It'd be easy to say "just tag switch and decline the CTA" or "just only play medium or higher powers", but I can understand why that wouldn't be satisfactory. OTOH, I can't really support making the feature optional, if only because I can't help but think that will make it less likely the things about it that do need tweaking for better realism/fun (chiefly, that countries should be less willing to ally against countries they like, trust, and do not feel threatened by, and that countries should not be able to end up at war with countries who really couldn't feasibly prosecute that war with them... and by this I mean Byzantium fighting Brunei, not Sweden) will actually get fixed. If both happen, so much the better? I certainly don't begrudge you your play style just because it's not my own.
Like I said, I wouldn't have any trouble with the system if it took into account factors other than "Ally? TO WAR!" At the moment, it does not. I'm fairly certain the system has a massive hole in it due to this.
And I don't begrudge you your playstyle.

It's just that, at the moment, I can't play the game without being effected by it. If I was able to play HttT without the DW changes whilst having DW installed, I wouldn't be complaining, trust me. Unfortunately, I can't, since I bought DW on Steam.
But please stop saying it's impossible to play OPMs, or that you really can't play them, or what have you. You really can, just in a radically different playstyle that is not what you are used to and perhaps are unwilling to use. Again, people have done it and posted it, so this isn't theoretical. CTA doesn't "break" the game, it just changes it in a way some people like and some people don't. Looking at it that way will hopefully help cool tempers when discussing the issue.
Honestly, if I wanted a game like this, I'd be playing Crusader Kings, which is much more about political maneuvering than EU3 is. This expansion broke the core gameplay of the game without any way to rollback to a system similar to HttT's.
Anyway, see above on the AI comments.
Several devs have already posted saying that it is, in fact, a planned feature and not a bug - and the only thing I've seen confirmation there is intent to tweak is the willingness of the AI to ally with someone who is at war.
Wow. It's funny how many people I know are unwilling to buy DW because of the Cascading Alliances. :| I'd love to play HttT with them but, again, no way to play an earlier expansion, especially not on Steam.
TL;DR: The AI is the trouble. I'd have no problem with a realistic system of computer nations banding together to try and stop my rise to power, or a single big nation trying to stop me. At the moment, though, you can get a reaction completely out of proportion to what you're doing. If I'm playing Mamluks and I attack and conquer the Ottomans then that gets a SMALLER REACTION than playing Mamluks and attacking and conquering an OPM. You can say, "Oh, well, it's because they're afraid of you" or something like that, but you can't deny that it's a system that is intrinsically flawed.