I think you're largely correct in your assessment of Paradox's rationale, but I think "4X" would be the most accurate way of putting it. It may be the most glorified, historically-detailed 4X game ever, but that's exactly what it is through and through. I can't believe that I've missed this obvious fact up to this point; even the EU4 wikipedia article makes this abundantly clear.
Obviously then, the rest of us who are looking for an open-ended history simulator set in this period will never be fully satisfied by EU4's trajectory. However, it must be said that there's basically no argument that adding more internal gameplay wouldn't add to the game immensely, if not for the fact that it falls outside of the game's intended scope. After all, by having a historical 4X environment without significantly modeling any internal stuff, you're not only stripping out so much interesting narrative but also so much in the way of strategic considerations. Indeed, 4X strategy games are intentionally abstracted and simplified to a heavy degree, and EU4 firmly lands in this brand of "strategy". It's actually not too far from Civilization if you think about it: more complicated systems in an asymmetrical historical setting with much more detail, but the overall premise remains the same.
The funny thing is that everyone on the forums is arguing over "sandbox vs. simulation vs. determinism" when EU4 is really none of the above; it's basically a glorified 4X game with random/quasi-deterministic events and a range of rigid (often hard-capped) abstractions for mechanics. That's not really a formula for a historical sandbox or a historical simulation, and watching the devs frantically tweak AE and related values in an effort to please people has been somewhat comical. I do still enjoy the game of course, but a lot of my enjoyment comes from pretending that it's something it's not and ignoring the parts that contradict this while I play.
I would love to see where Paradox has actually stated their design goals, because- even if I suspect that I've managed to capture them above- I don't think I've ever read anything like that.
I'm appreciative of Paradox's efforts to accommodate modders, but- from my admittedly not-the-most-knowledgeable outside perspective on EU4 modding- it seems like most of the potential for modding lies in just adding more content (adding more detail to the map, adding new tags, adding more flavor events, etc.) rather than dramatically changing how the systems behave. I realize the reason for this, but I feel that it's worth pointing out that there seems to be a significant portion of the forum community who like me will never be fully satisfied by simply adding more content to the existing game.
It's just kind of sad for the people who are looking for open-ended history simulators (sandbox-y and deterministic alike), because EU4 is the closest thing there is given the level of historical detail in the game, but it can never really serve that purpose due to design decisions that informed how the game's basic systems operate. Oh well, best of luck Paradox with wherever you take EU4, but does anyone know any other non-Paradox games (I already own games from all of Paradox's other grand strategy series) that might be more in line with what I've posted?