Yes the majority of the economic system is poorly designed in general and doesn't work very well for a game of this scale (or with automation and AI being as poor as it is at least). Actually changing that would be a daunting overhaul of the entire game, however, and it's much easier to slap a lazy equation to bottleneck the whole system and then call it a day.
I wish that was just my own sarcastic thought, but that's what they actually did. It's cringe-worthy. I don't understand what they were thinking and how they didn't realize how unpopular it would be.
What they were thinking? Possibly some variant of,
"Desperate times calls for desperate measures" and "Every time we change a major system, people complain and then they adapt and/or stop playing, and some players who haven't played for a long time return to see if this is more to their liking".
It is working as designed, and it isn't as if there wasn't worry about the potential downsides when it was announced, and it isn't as if they can be the least bit surprised - at least those on the team with elemental mathematical knowledge or knowledge of players - of the effects of the S-curve on optimizing players (try to stick to the centre of the curve, regardless of what micromanagement hassle or counterintuitive gameplay is needed to do that), and it isn't as if they don't know perfectly well that the empire-wide increase to growth cost is something that makes no sense at all as an abstraction for population growth, but is simply an effective way of reining in the technical problem of the extreme slowdown issues the game suffered after the
last major overhaul years ago, greatly increasing POP numbers.
It certainly does absolutely nothing to address the underlying issue, that the economy is based on POPS doing JOBS (affected by various multipliers) and that so long as this is the case, population increase, by whichever means possible, will remain the most important aspect of the game for empire optimization purposes.
They were very open about how they were going to nerf planetary POP growth, and the only really surprising thing to me is just how high they set the "per pop" multiplier since the diaries focus more on the growth S-shape for planets, something that in the current game quickly becomes fairly irrelevant except for players manipulating per-planet growth to stick to the middle on depopulated planets with massively excessive housing due to the empire wide-penalty.
And I'll admit that setting that multiplier so high that it strongly encourages players to adopt deeply counterintuitive approaches such as having other empires grow your POPs in catch-and-release cycles or stealing them by bombardment acquisition is something I find terribly amusing, but even this I'm pretty sure some on the development team will have considered, and that it simply has been deemed an acceptable cost to restoring the game to a stage where it is possible to play the game to the endgame without slowing to a crawl due to POP numbers. After all, that is something that can be tweaked independently by focusing on those specific game mechanics rather than the underlying POP growth structure.
They are five years past release and desperately trying to shore up a project that is crumbling under its own weight, with every major DLC or fundamental rethink of game mechanics adding at least as many problems as it fixes, but in the cursed spot of development where so long as the DLC sells well enough to keep the project alive, or they need to keep it alive until a successor is made, they have to.
I imagine some of them are even proud of the result, because the code base has got to be tough to work with by now, and every victory counts.
EDIT: Minor edits for clarification.