It's also a game that has highly abstract forms of gameplay for several other aspects. Because there is by design no downward spiral similar to that of the Spanish Empire, and because there is nothing stopping a colonial overlord from shipping all of their troops and sending all of their fleets (except external events) to fight a rebellious colony. Which means that it's not only colonies that are stronger than historically, but their overlords as well, so the larger armies make a lot more sense as a consequence of general gameplay (of course, this also leads to problems with smaller nations, for example it's practically impossible for Albania to kick Ottoman and Venetian ass as badly as they did under Skanderbeg). It's just the way things will have to be because of the level of abstraction the game operates at.
Anyway, colonies only cost money when colonizing, and even then it's barely noticiable if you stick to your number of colonists available. Oversettling is supposed to be prohibitively expensive and inefficient, not to mention considerably slower. It's easy to dominate an entire continent with the right approach (ie, cutting off Quebec and rushing along the coastlines in Canada and America until you beeling across Mexico to the West Coast and then scramble along and up). And of course, you always have the option of just beating the fuck out of some poor bastard and stealing their lunch money, colonies are cheap in peace cost and cause less AE.
Personally I'd see that twin mechanics of possible overlord decay or taking action to strengthen a colony too much would be what can lead to major problems with a colonial empire, but I'd still prioritize colonial nations mechanics being extended to all overseas colonies (besides few exceptions, like say Morocco for Spain). In terms of Pdox coming up with a solution to this little pet peeve of mine I hope that Disasters will have a bigger effect on colony-overlord relations.
