Yes I played one of your games and it really demonstrates why this system doesnt work.
Just have a look at this game:
http://warlight.net/MultiPlayer.aspx?GameID=3134354
Turn 1: I start in finland, soviet starts in norway. I take finland, he takes norway.
Turn 2: I decided in my head "to hell with this game and its stupid rules". I place 14 in northern finland and take norway. Soviet Russia buddy follows the rules and by consequence I screw him out of a game. If I had been serious, I could have taken over the rest of his territory, but as I and chaos dragon were taking
the piss.
Of course the problem here is that no-one is bothering to follow the rules, or only some people are. Anyways onto turn 3.
Turn 3: Soviet russia buddy complains in the chat, I decide it is time to take the piss even more:
This image does highlight another flaw though. There is no point to this game when there is fog. You can essentially say whatever you want. No-one believed me only because I was being an absolute asshat because I thought it was funny for some reason, but you could easily accuse someone of doing something without anyone else having any idea.
My point is that it is a nice idea, but doesnt work.