Perhaps larger cities should be able to cater since they have more resources? Perhaps this was Inno's reasoning?
-OR-
Like many people have mentioned here, people should start skipping optional troops size research?
If anything, they made things worst. In construct chapter, I run out of troops in 2 days (though admittedly I'm not battle-focused) however the catering costs range from 9 to 20k resources of EACH tier, which is more than my production can handle, and I don't even have the last mandatory squad size upgrade done yet (before you ask, yes, I skipped the optional ones!).
Moreover, my production is, I expect, larger than that of the average player because I focused a lot on mountain halls/golden abyss, thus granting me nice boost in production and a large one in population, and on top of that, I also have a large number of magic residences and some of the best population-per-tile event buildings which I boosted with Royal Restoration, which allow me to have population enough to afford more manufactories than the average non-paying player for sure. Despite that I often have to do large cycles of MM spells just to bring my production back to positive values, so I'd say that there definitely is the problem with numbers.
There have been threads for months if not a year already, and all the arguments I see defending the current approach seem rather invalid to me, especially the one about "Inno needing money". I give Inno plenty of money. I don't feel rewarded for that, struggling as I do with tournament costs just to end up with very mediocre scores, when players in early chapters can easily hit 6k and up. Most of the time I can't even help people in lower chapters / "dedicated tournamentalists" in earlier chapter because even just a little bunch of cross-tier trades would throw my already pitiful economy into chaos.
The cost curve is just too steep.