That you can not create sectors yourself is a investment into future possible features relating to sectors.In its current state it completely fails at its job and it all boils down to not being able to create sectors yourself.
I still remeber the times where Sectos were used as dump for high unrest planets.
Or the single mega sector, to save on Governor cost (even when back then, the only cost was used up leader capacity).
Player defined sectors just give us way to much freedom to work around any future addition to the sector mechanic.
It definitely needs improovement of course. Indeed 2.2.4 just made a minor one, by increasing their range from 2 jumps to 3 jumps from teh sector capitol.
They need to add the ability to move the sector capitol (as long as that does not make the sector invalid) as well as more agressive integration of conquests. Maybe even a way to manually overwrite it to a limited degree (as long as the rules are not broken).
And I agree that the Automation part right now is FUBAR. Give us a way to apply a 25% tax up to a limit, at least.