I can't agree with this proposal. In my recent Hesse game, I consolidated most of the German states under my rule and formed Germany, but by then Savoy was the emperor. I did end up disbanding the empire because I wanted to, but by then Kiev (of all things!) was the emperor. Historically, the HRE became German-focused early on and never moved away from that, but there's no inherent reason why the political center of the Empire couldn't have shifted away from Germany if the Habsburgs lost control. So I didn't see any real contradiction in ruling a Kingdom of Germany from within an Empire that was now ruled from elsewhere anyway. My consolidating my own control over the Germans should not have automatically disbanded the Empire, nor should the existence of the Empire have made it impossible for me to declare myself the de jure King of Germany (instead of just King of a massively-expanded Hesse that ruled over nearly all the Germans, which I already was de facto anyway).