I don't really see the problem with this from a historical perspective, it's not like Venice, Genoa or the Hansa remained powerful entities all throughout the game's era anyway (in fact, they all completely succumbed). It's a fair change in the direction of realism and historical accuracy, which should take precedence in cases like this. While some may argue that EU4 isn't a history simulator, it is one way more than it's a senseless blobbing simulator.
Venice experienced multiple resurgences and only fell in the last few years of the game while Genoa dominated Europe through banking at its height. Merchant Republics becoming Empires or majors due to a player aware of what not to do is not unrealistic.
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